In April 2016, the claimant was made aware that the respondent company would be ceasing business on Friday of the same week. No indication of this planned closure had been given to any employees and they were informed that the business would be in no position to honour any outstanding pay, notice pay, redundancy pay or holiday pay. The company had completely failed to comply with its Article 215 Employment Rights Order (NI) 1996 and no form of dialogue with any of the employees had been established.
There was undisputed evidence in the case that the respondent’s undertaking consisted of two separate establishments at two different locations. As a standard pre-requisite to a claim, it had to be demonstrated at least that 20 employees from one establishment were proposed to be made redundant within a period of 90 days or less. The tribunal held that in deciding whether an individual is to be regarded as having been assigned to one establishment the ‘human stock test’ was appropriate, established in the case of Gale v Northern General Hospital NHS Trust [1994] IRLR 292. The claimant satisfied the criteria and his claim was well founded with a protective award also being made.
Practical lessons
The case of Gale, in which the ‘human stock’ test was initially utilised, was a transfer of undertakings case but its utility is clear in facts such as the present case. However, as has been held in other transfer of undertakings cases, difficult questions of fact often must be determined by the tribunal and thus hard-and-fast criteria are unlikely to assist.
Unsurprisingly, factors such as the terms of the individual’s contract of employment and the amount of time spent at that part of the business will be instructive. In the present case, the tribunal listed 18 separate considerations many of which were specific to the working arrangements of the claimant and the chronology of the respondent’s plan to close. Other cases have focused on the need to look at the ‘reality’ of the situation which requires a careful investigation looking beyond solely what an employment contract may say. The ‘human stock’ test provides guidance, but as this case demonstrates, a tribunal will have discretion to consider the facts it deems most relevant to the case at hand.
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