Don’t risk becoming a hostage

WynLewis

It was reported on 7 January 2014 that the HR Director of Goodyear was one of 2 executives who were taken hostage in France by a disgruntled workforce, which barricaded them in a room by using a (Goodyear?) tractor tyre. The price of the executives’ release was either a promise not to close the workplace, or the payment of substantial financial compensation. Neither that promise nor financial compensation was forthcoming, so the executives remained in situ and were allowed only water and use of their mobile phones (so that was OK.…). However following police intervention today (something that has been permitted in France since 2008 after similar executive hostages were taken at 3M, Caterpillar and Sony), the Goodyear executives have been freed.

Could the same happen in the UK? It seems unlikely. But if it did, in what context might it happen (and would there be any point, given that the effect on any “agreement” that was reached as a result of this sort of duress would probably be that it was unenforceable anyway)? Leaving aside any comparative assessment of the Anglo-French approach to industrial relations, the areas that are most risky (in terms of causing an emotive workforce to direct its wrath against management) lie in the various situations where information and consultation is a requirement.

The first of these is collective redundancy. The obligation to inform and consult where an employer proposes to dismiss 20 or more people at one establishment lasts for 30 days before the first dismissal takes effect; and the obligation to do so when the proposal relates to dismissing 100 or more people lasts for 45 days (having been reduced – last year – from 90 days). But in the 2013 case of USDAW v. Ethel Austin Ltd (usually known as the Woolworths case) the EAT ruled that the words “at one establishment” should be disregarded. This has exposed all employers to an obligation to inform and consult (and to significant compensation for not having done so) in many more situations than before. The opportunity for employers to take the Judges of the EAT hostage was, however, thwarted by a government decision by BIS to appeal the EAT judgment. This is due to be heard by the Court of Appeal on 21 or 22 January 2014 and (if a decision is reached, rather than an ECJ referral) the outcome could be very significant indeed. Employers should watch out for this if they wish to avoid a failure to inform and consult more extensively to result in being taken hostage.

The second situation relates to the information and consultation obligations in a TUPE situation; and in particular where there is a service provision change. The new TUPE regulations that are expected to come into force with effect from 31 January 2014 (with some transitional arrangements that delay some of their effect) don’t provide an employer with a new defence of “being taken hostage” as justification for failing to inform and consult. They also don’t sanction this type of action if an employer wishes to start collective redundancy consultation sooner than after a TUPE transfer has completed (which is the current position, technically). But the amending regulations will change the Trade Union and Labour Relations (Consolidation) Act 1992 so that information and consultation in a collective redundancy situation (see above) can start (at the transferee’s choice, and provided the transferor agrees) before a TUPE transfer takes effect. This may well take the heat out of many covert redundancy consultations (and so avoid hostage-taking) by enabling parties to be up-front about the reality of reorganising following a TUPE deal. A transferee will, however, still be in the driving seat, because it may decide simply to stop early consultation at any time – though whether this will stop the clock running, or cause the clock to have to start again, will become more clear when the final version of the new regulations has been approved.

The information and consultation aspects of works councils represent another (emotive, but little-used) potential to result in hostages to fortune. But this European concept of mandatory in-country and cross-border multinational consultation bodies about significant business planning issues has generally not made the leap from Brussels to the UK and so poses less of a threat to the personal liberty of senior staff-side personnel.

A less emotive area of consultation – which isn’t changing – is the obligation to do so for at least 60 days when an employer wishes to change certain pension arrangements.

Employers should therefore ensure that they’re up to date with other information and consultation obligations: the Channel is easy to cross, there are many French multi-nationals and direct-action Gallic traits may follow if the Goodyear Gang still gets its way and exports its methodology.

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