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Collective redundancy - latest position

26 March 2012

When a decision is made by a parent company that may result in redundancies, when does the subsidiary need to start collective redundancy consultation? The Advocate General’s opinion in United States of America v Nolan is, when a strategic or commercial decision is taken which compels the employer to contemplate or plan redundancies. The A-G’s opinion is not always followed by the ECJ, but usually will be.

The case of UK Coal Mining v NUM had indicated that consultation needed to start before the decision which may result in redundancies had been taken (e.g. a decision to close a site). This hasn’t been expressly rejected by the A-G’s opinion, but it appears to have been diluted, which is good news for employers.

The European law on this point has been unclear to say the least, and this opinion only helps as far as saying that consultation should not be started too soon or too late. Deciding when exactly that is might not be so simple.

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