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EAT decisions sent Friday 07.07.12

A win for Dell concerning their appeals in respect of the EC (Protection of Employment) Regulations 2000

EAT decisions sent Friday 07.07.12 – A win for Dell concerning their appeals in respect of the EC (Protection of Employment) Regulations 2000


Amongst the Employment Appeals decisions sent last Friday, 7th July 2012, was the appeal by Dell Products Limerick against a number of Rights Commissioner decisions in respect of the (Protection of Employment) Regulations 2000. For the purposes of this review I have looked only at Case PE2-PE3/2010 (Tom O’Donoghue and Donal O’Sullivan). Dell was also successful in a number of other appeals sent on 7th July namely cases PE4-PE6/2010, PE352010, PE7-PE34/2010, PE36-PE40/2010 also included in decisions of 07.07.12).

 Background:

These cases concern an appeal by the appellant (Dell Products Limerick) against the Decision of a Rights Commissioner ref: PE78397/09/MR and 27 others under the European Communities (Protection Of Employment) Regulations 2000, Protection Of Employment Act,1977. In essence the appeal concerned the Rights Commissioner decisions that the Appellant (Dell Products Limerick) failed to properly comply with Section 9 in respect of consultations with employees. The Rights Commissioner originally held that there was no breach of Section 10.

Appeal Arguments by Counsel for the Appellant (Dell Products Limerick)

Counsel for the Appellant explained that communication with the employees took place on three levels in compliance with the 1977 Act (as amended):

1. General communication to all.

2. More directly by individual unit managers and pre-prepared presentations.

3. Letters addressed to the affected employees.

In addition the Minister was informed by letter 30 days before the first dismissal. Counsel opened a letter addressed to an employee and contended that the Rights Commissioner concluded that the form of letter offended S.9 of the Act and that the letter constituted a form of dismissal.  Counsel argued that the letters of January 2009 were nothing more than indicative letters and provided estimates and not specifics. Counsel argued that not a single employee was served with notice before April 2009 and referred to cases c-188/03, Junk v Kuhnel and Fujitsu Siemens.  Counsel argued that the Appellant complied with all of the requirements under Section 9 and in addition:

1. The employer did not start the consultation too late.

2. By reference to the Fujitsu case there was no question of the employer having to consult any earlier because of the strategic to migrate was the employer decision.

3. There is no prohibition in the employer dismissing employees whilst the consultative process is on-going provided.

Counsel held that the Rights Commissioner wrongly decided that the employer started to dismiss before consultation. In respect of Section 10, the Rights Commissioner was correct that there was an extensive body of consultation/communication and hence there was no breach of Section 10.

A number of witnesses appeared on behalf of the appellant including the site HR Manager who confirmed that no letters of termination were sent to employees. The first presentation (regarding the redundancies) was on 8th January 2009 and a subsequent meeting was held on 13th January 2009, to meet with employees that they needed to consult with in order to comply with legislation. They also met to get feedback from the employees. They met the site team again on five separate occasions. Documents for a meeting on 11th February were opened to the Tribunal. Minutes of meeting of 11th February were opened to the Tribunal.

Appeal Arguments by Counsel for the Respondents (Employees)

Counsel for the Respondents contended that the employer did not consult with the workers regarding the redundancy and that the consultations must include various information including the possibility of avoiding redundancies, the basis on which it would be decided which particular employees would be made redundant and the consultations should be initiated at the earliest opportunity and in any event at least 30 days before the first employee is dismissed. Counsel argued on 8th January it was made clear a decision had been taken to make redundancies and that the type of language used in the communication could only mean that the employee’s employment would come to an end. Notification had been given to the employees and there was no meaningful consultation. The decision regarding redundancies had been taken some time prior to 08th January 2009.

It was also argued on behalf of the employees that they were not allowed to have a committee or to negotiate or “sort out their redundancy”.. He also stated “I never had a chance to negotiate or to sort out my redundancy”Counsel for the Appellant subsequently contended that there is no evidence that any notices were issued before May 5th 2009 and that neither of the letters could be construed as a termination letter. He argued  “It must therefore be held that in circumstances such as those in the case in the main proceedings, the consultation procedure must be started by the employer once a strategic or commercial decision compelling him to contemplate or to plan for collective redundancies has been taken”.

Determination of the Employment Appeals Tribunal:

The Tribunal makes the following Determination:

Regarding Section 9, the employer is entitled to make a strategic decision and the Tribunal is satisfied that the meeting of 8th January 2009 was the commencement of this process. The Tribunal unanimously determines that the complaint by the Respondent is not well founded and the Appellant employer is not in breach of Section 9 of the Act and accordingly the Rights Commissioner decision is upset.

Regarding S. 10 of the Act the Tribunal upholds the Decision of the Rights Commissioner.

Legal Commentary

Section 9 of the Protection of Employment Act 1977 (as amended by Regulation 4 of the European Communities (Protection of Employment) Regulations 2000 (S.I. 488 of 2000) provides that:

(1) Where an employer proposes to create collective redundancies he shall, with a view to reaching an agreement, initiate consultations with employees’ representatives

Section 9(2) provides that consultations shall include the following matters—

(a) the possibility of avoiding the proposed redundancies, reducing the number of employees affected by them or [mitigating their [consequences] by recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining employees made redundant],

(b) the basis on which it will be decided which particular employees will be made redundant.

(3) Consultations under this section shall be initiated at the earliest opportunity and in any event at least 30 days [before the first notice of dismissal is given].

Subsection (3) was inserted by Section 12 of the Protection of Employment (Exceptional Collective Redundancies and Related Matters) Act 2007.This amendment was necessitated by the decision of the Court of Justice in Case C-188/03, Junk v Kuehnel [2005] E.C.R. 1-885 which held that the consultation process required by the Directive must take place before employees are given notice of dismissal.

The question of precisely when can an employer be said to be proposing to create collective redundancies has been considered in a number of UK cases including Hough v Leyland DAF Ltd [1991] I.R.L.R. 194, R. v British Coal Corporation, ex p. Vardy [1993] I.R.L.R. 104 and Griffin v South West Water Services Ltd [1995] I.R.L.R. 15. .

The meaning of the expression “is contemplating collective redundancies” in Art.2(1) of Directive 98/59 was clarified by the Court of Justice in Case C-44/08. Akavan Erityisalojen Keskusliitto SEK ry v Fujitsu Siemens Computers Oy [2009] E.C.R. I-8163. For those interested a summary of the judgement by the European Commission Legal Service is contained here. The Court concluded that the consultation procedure must be started by the employer once he adopts strategic decisions or changes in activities which compel him to contemplate or to plan for collective redundancies.