GMB Union and Others v AES Realisations (Coventry) Ltd and Secretary of State for Business Energy and Industrial: 1306331/2020 and Others

EMPLOYMENT TRIBUNALS

Case No 1306331/2020

Between

GMB Union and OthersClaimant

AES Realisations (Coventry) Ltd and Secretary of State for Business Energy and IndustrialRespondent

Before

Employment Judge C Kelly

Mr S Davison and others for claimant

(1) AES Realisations (Coventry) Limited and (2) Secretary (instructed by State for) for respondent

Date 27 January 2025

JUDGMENT

[1]These are the written reasons for a decision given by me at the hearing of this matter on 26 November 2024.

[2]This matter concerns a number of different claims from individuals against their former employer, AES Realisations (Coventry) Limited and the Secretary of State for Business Energy and Industrial. Matters proceed against the Second Respondent only, the First Respondent having entered into administration on 7 May 2020 and then into liquidation on 9 November 2022.

[3]The claims are for a protective award under section 189 of the Trade Union and Labour Relations Consolidation Act 1992 (“the Act”) on the basis that there has been a failure to carry out a proper consultation in accordance with the requirements of section 188 of the Act.

[4]Mr Levay of counsel appeared for Unite the Union (“Unite”), together with three other individual claimants (Lindsay Roberts, Aaron Page and Tracy Sheer); Mr Levay represents all four individuals.

[5]Mr Todd represented the GMB Union (“GMB”).

[6]Insofar as there are other claimants, those claims are all dismissed as the claims were not pursued at this the final hearing and there was no attendance by the individuals concerned, whether in person, or by representatives.

[7]There was no appearance on behalf of the First Respondent or Second Respondent. The Secretary of State left it to the tribunal to make such decision as it considered justified from the evidence before it.

[8]In addition to the claims under section 188, a number of claims included claims for notice pay, holiday pay and arrears of pay, but these were not pursued before me.

[9]The case management order of Employment Judge Noons, insofar as the protective award aspect of the claims is concerned, set out the issues to determine in the following way: 9.1. were Unite the Union and GMB Union the recognised trade unions for the two establishments of the First Respondent; 9.2. were 20 or more people dismissed in a 90 day period at each establishment? 9.3. if yes, did the First Respondent comply with its obligations to inform and consult with the relevant trade union; and 9.4. if no: should a protective award be made and if so for what protective period – the claimants say 90 days. The law

[10]Section 188 of the Act states: “(1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.”

[11]Hence, the obligation arises where there is an intended dismissal by reason of redundancy of 20 or more individuals at an “establishment”.

[12]Section 188(1A) requires the consultation to be made in good time, and where 100 or more are to be dismissed, at least 45 days before dismissal, and otherwise at least 30 days before.

[13]The consultation must include, by section 188(2), ways of avoiding the dismissals, reducing the numbers to be dismissed and mitigating the consequences of the dismissals.

[14]A written disclosure must be made to any appropriate representative, various issue set out in section 188(4), to include, broadly, such things as the reasons for the proposal, the numbers proposed for redundancy, the method of selection for redundancy and so on.

[15]For the purposes of conducting the consultation, section 188(1B) states that the appropriate representatives for any affected employees are the trade union recognised by the employer (section 188(1B)(b)(i)).

[16]There are then provisions that there may be special circumstances where an employer might not be able to comply with the relevant requirements imposed in relation to timing of consultation (section 188(7A)).

[17]Section 189 provides the right for a complaint to be made to an employment tribunal. It states: “(1)Where an employer has failed to comply with a requirement of section 188 or section 188A, a complaint may be presented to an employment tribunal on that ground– (a)in the case of a failure relating to the election of employee representatives, by any of the affected employees or by any of the employees who have been dismissed as redundant; (b)in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related, (c)in the case of failure relating to representatives of a trade union, by the trade union, and (d)in any other case, by any of the affected employees or by any of the employees who have been dismissed as redundant.”

[18]Section 189(1) works in such a way, accepted by those before me, that if there are trade unions that have been formally recognised by the respondent employer, then it is the trade union that brings the claim under that section, not the individual employees. It was not suggested to me that there were elected employee representatives, who are provided for as potential claimants in section 189.

[19]In order for a trade union, such as two of the claimants in this case, Unite the Union and GMB, they must be recognised by the employer.

[20]Where an employment tribunal finds a claim well founded, it must make a declaration to that effect and make a protective award (section 189(2)). A protective award is an award in respect of one or more descriptions of employees, who has been dismissed as redundant (or proposed to be dismissed as redundant), and in respect of whose dismissal or proposed dismissal the employer has failed to comply with a requirement of section 188, ordering the employer to pay remuneration for “the protected period”.

[21]Section 189(3) defines the “protected period” as follows: “(4)The protected period— (a)begins with the date on which the first of the dismissals to which the complaint relates takes effect, or the date of the award, whichever is the earlier, and (b)is of such length as the tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer’s default in complying with any requirement of section 188; but shall not exceed 90 days”

[22]In Susie Radin Ltd v GMB and others

[2004] EWCA Civ 180

Gibson LJ provided guidance on how employment tribunals should determine the length of the protected period, but recognising that it is always a matter of determining what is “just and equitable”, this being the basis of judgment conferred upon the tribunal by section 188(4)(b). He said: “45. I suggest that employment tribunals, in deciding in the exercise of their discretion whether to make a protective award and for what period, should have the following matters in mind.(1) The purpose of the award is to provide a sanction for breach by the employer of the obligations in section 188: it is not to compensate the employees for loss which they have suffered in consequence of the breach.

(2) The tribunal have a wide discretion to do what is just and equitable in all the circumstances, but the focus should be on the seriousness of the employer's default.

(3) The default may vary in seriousness from the technical to a complete failure to provide any of the required information and to consult.

(4) The deliberateness of the failure may be relevant, as may the availability to the employer of legal advice about his obligations under section 188.

(5) How the tribunal assess the length of the protected period is a matter for the tribunal, but a proper approach in a case where there has been no consultation is to start with the maximum period and reduce it only if there are mitigating circumstances justifying a reduction to an extent which the tribunal consider appropriate.”

[23]The ability of the employer to pay the protective award is not relevant (Mrs C Smith, Ms A Moore v Cherry Lewis Ltd (In receivership)

UKEAT/0456/04/DM

[24]Section 182 requires the Secretary of State to make payments out of the National Insurance Fund, subject to certain limits, where he is satisfied of the employees’ entitlement to such. This decision essentially addresses the issue of such entitlement and the Secretary of State has been added to proceedings to be bound by the findings made. The witnesses and facts of this case

[25]As there was no attendance by, and no evidence from or on behalf of any of the respondents, the facts were all taken from evidence from witnesses for the Claimants. I heard evidence from three individuals: Martin Hindall, Lynn Shakespeare and Rebecca Mitchell, each of whom had provided witness statements.

[26]The evidence of these witnesses was not challenged. Evidentially, therefore, it is for me to review and consider whether to accept the evidence received, and whether if accepted, it is sufficient to meet the requirements in order to succeed in a claim for the failure to comply with the obligations in section 188.

[27]The First Respondent had two sites through which it traded: Coventry and Birmingham. The position in respect of each site is different. They are the “establishments” for the purposes of section 188.

[28]Ms Shakespeare’s evidence was that the First Respondent purchased Remploy in 2013 and she refers to an agreement having been in place between Remploy and various trade unions, which was referred to as “the Accord Agreement”. This was provided in the bundle. The Accord Agreement identified that Remploy would recognise various unions at certain sites. The Accord Agreement set out recognition for Remploy in respect of two unions: GMB Union in respect of the Birmingham site and the Trade and General Workers Union in respect of the Coventry site; in both cases, this was stated to be in respect of weekly paid employees. Ms Shakespeare’s evidence was that the recognition of the unions was carried on in practice following the acquisition by the First Respondent of Remploy.

[29]Similarly, Rebecca Mitchell, who provided a slightly longer explanation of the relevant background, but essentially, her evidence was that Remploy was purchased in 2013 by the First Respondent and that recognition continued. She says that recognition existed for the GMB Union at both Birmingham and Coventry, in respect of both weekly and monthly paid staff.

[30]The evidence was that those working weekly were later paid monthly.

[31]As regards the Birmingham site, the key evidence is from Mr Hindall. I should say, however, there was some limited evidence on the Birmingham site from Ms Mitchell too, where she said that the consultation was not a proper consultation, as there was no consultation about the employees being made redundant on 15 May 2020, and that there was no consultation about the fact employees would no longer receive their enhanced redundancy package.

[32]Mr Hindall’s oral evidence appeared inconsistent with his written evidence. Mr Hindall’s written evidence was contradictory, for example: 32.1. his witness statement at paragraph 6 recognised that the GMB Union had meetings with the First Respondent and that redundancy packages had been agreed, whereas, at paragraph 15 he says that there was no consultation with the GMB; and 32.2. in his oral evidence, he accepted that there were meetings and that there was a consultation exercise relating to the potential closure of Birmingham site, with the intention to move workers to Coventry.

[33]Having explored the position further with Mr Hindall orally he explained to me that it was from late 2019/early 2020 that efforts were made by the Respondent employer to consult, and he told me that there were discussions about transfers from Birmingham to Coventry, because the intention was to close down Birmingham and potentially therefore save jobs by transferring to Coventry. He also went on to say that redundancy packages had been agreed, but once the administrators got involved, it was just a case he said of people being dismissed. There was then a query he said about what happens in respect of those agreed redundancy packages; this was communicated it was said in a call from the administrators.

[34]Mr Hindle was “on the ground” at the Birmingham site. His evidence was that he was an inventory controller and that he was a representative for the GMB Union, which he says, was recognised by the First Respondent.

[35]Mr Hindle says that 52 people were made redundant on 15 May 2020 from the Birmingham site. Discussion and conclusions (a) What are the substantive claims?

[36]I start by recognising that there is no active opposition to the claims. However, this does not mean that they necessarily succeed, the essential elements of the failure to consult need to be made out on the balance of probability. The burden of proving the failure to consult rests with the Claimants; that this was the correct way to approach the evidential test was accepted by both counsel. (b) Were the claimant unions recognised by the First Respondent and, if so, in respect of which employees?

[37]As noted above, the issue of recognition of the unions needs to be determined. If they were recognised, then the individual claimants’ claims will need to be dismissed (as they do not pursue any substantive cause of action aside from a protective award).

[38]Counsel for the parties drew my attention to the relevant provisions of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”). TUPE in relation to the ongoing recognition on a business acquisition in relation to those employees, and whilst it is not clear quite what employees will have transferred across, and the evidence is scant in respect of all of that, I am content to accept, given what followed, that in fact there was a transfer under the provisions of TUPE and that TUPE applies in respect of the Remploy accord agreement.

[39]I noted during submissions that the Accord Agreement referenced an obligation to vary its terms to be made in writing. I accepted that this would not prevent a further agreement to recognise being made by oral agreement or conduct. There is no requirement for a written form of agreement to be entered into for an employer to recognise a union.

[40]Further, counsel drew my attention to Regulation 5 of TUPE which provides for the transfer of the recognition agreement to the new employer. There was no detailed evidence as to the underlying substantial details (e.g. what part of business was purchased, who might have transferred from Remploy to the First Respondent etc), but it seems likely that this was an acquisition of the entire business and workforce, and that TUPE would apply in such circumstances. Further, this seems especially likely given Ms Shakespeare’s and Ms Mitchell’s evidence on the continuation of recognition after the purchase. But, even if TUPE did not apply, there was, in my judgment, a recognition by the conduct of the First Respondent in continuing to engage with and recognise the unions.

[41]Ms Shakespeare told me that there had been discussions at the Coventry site, by Unite the Union and GMB Union in relation to the weekly paid employees, or the “shop floor operatives”. I accept her evidence.

[42]The position in respect of Birmingham is different in that Unite does not profess any interest in the Birmingham territory, GMB is the only interested party it is said in relation to Birmingham. Certainly, that again is recognised in the evidence that Mr Hindall gave, who says that he had been working for the Respondent at that site for a long period of time and it is clear that he was a GMB representative, and it seems to me there can be no real doubt that GMB was recognised in relation to Birmingham.

[43]I have to make a determination whether there was recognition on the balance of probability as to what is likely to have happened based on the evidence before me, and I conclude that there was indeed a recognition of the unions as follows: 43.1. Birmingham: GMB Union; and 43.2. Coventry: GMB Union and Unite the Union.

[44]I am satisfied that the First Respondent recognised the GMB in respect of Birmingham and both GMB and Unite in respect of Coventry.

[45]The recognition (for both sites) was in respect of the labour force, the shop floor staff, or those involved in the manufacturing process – whichever term is preferred, office/clerical staff were excluded from the Accord Agreement. Those who were paid weekly were, I was told, eventually switched to monthly pay. Thus, those in the shopfloor category, that received monthly pay, benefitted from the same recognition.

[46]Accordingly, any claims for breach of section 188 must be brought by the unions mentioned in respect of the site concerned. For this reason, I dismiss the claims from the individuals that remain live, who I am told, all fall into the shopfloor category. (b) Were 20 or more individuals dismissed within a 90 day period?

[47]Mr Hindle’s evidence was that 52 people were dismissed on 15 May 2020 from Birmingham. In the absence of anything to the contrary, I accept that evidence.

[48]Mr Mitchell’s evidence is that the First Respondent contacted approximately 50 furloughed workers on 11 May 2020 to dismiss them with immediate effect. She says that there were around 110 workers at the Coventry site overall. When the First Respondent was placed into administration, as I discuss further below, it was clear that over a period of days, individuals were contacted to be dismissed, and it is more likely than not that 20 or more individuals were dismissed in 90 day period.

[49]I am satisfied, therefore, that the threshold requirement to consult under section 188(1) or 20 or more employees being dismissed in a 90 day period is met. The obligation to inform and consult therefore arose. (c) Was there a failure to comply with consultation obligations?

[50]Dealing first with Coventry, there is no evidence to suggest that there was any consultation whatsoever, and the only evidence that does exist makes plain that there was no consultation at all. The appointment of the administrators was the trigger for a number of individuals being dismissed by reason of redundancy from the Coventry site. Ms Mitchell told me that this happened by telephone calls from 11 May 2020.

[51]There is reference in Ms Shakespeare’s witness statement to what she described as a random phone call on 12 May. Presumably one of the witnesses is wrong about the date, or, there may have been a number of calls over several days, which is perhaps more likely. I am not convinced that much turns on the actual date of dismissal, in terms of the actual remedy to be provided in the event of a breach of section 188, but, the protective period is a period which starts on the date of dismissal.

[52]I seek therefore, to provide some certainty and ease for those implementing the consequences of this decision, to determine the date of dismissal of all those likely to be affected, and I do so, as 12 May 2020. I do so, accepting the evidence of Ms Shakespeare as to the date of the calls said to have taken place. I should note, that Ms Mitchell indicated that the call took place on 11 May 2020 indicating that dismissal would take place that day. Ms Shakespeare said that the call indicated dismissal took place with Unite’s union members on 12 May 2020 and indicated dismissal with effect from 7 May 2020. I note from extract of the Administrators’ report of 30 June 2020 that their appointment took place on 7 May 2020, and it seems to me, that it is perhaps more likely than not that administrators would have reported back to employees that the date of dismissal was commensurate with the date of their appointment.

[53]As regards the Coventry site, therefore, I am satisfied that there was no consultation at all, and I am satisfied that on a legal analysis, notwithstanding the fact that the First Respondent employer may well have been in administration with effect from 7 May, there was still an obligation upon the company to carry out an appropriate consultation under section 188 and that this did not happen.

[54]The position concerning Birmingham is, as noted above, different. Mr Hindle accepted that there has been attempts by the First Respondent to consult, because, he said, there were attempts to move employees from Birmingham to Coventry and, indeed, he accepted that there had been redundancy packages agreed. Ms Mitchell’s evidence was not that there was no consultation with Birmingham, but that it was no “proper” consultation, and it seems that her focus was on the “the change of circumstances” that arose following the administrators’ appointment.

[55]Mr Hindle accepted that there had been discussions with the unions about redundancy dismissals from the Birmingham site and that that these began in late 2019/early 2020, and that agreement had been reached to make various individuals redundant. Therefore, there is some evidence of consultation taking place and, if as seems likely, this consultation commenced from late 2019/early 2020, then it is likely to have met the required period of 30 days consultation prior to the dismissals taking place, which were in May 2020.

[56]I recognise that there may have been no prior warning of the administration and subsequent dismissal dates implemented by the administrators, but in my judgment, there was a consultation process engaged by the First Respondent with the GMB Union in respect of the Birmingham site.

[57]Hence, a claim cannot succeed on the basis that there was no consultation at all; the evidence from Mr Hindle is fairly clear, there were consultations.

[58]However, this is not to say that the consultation itself was undertaken properly and that it complied fully with the requirements of section 188. If it did not, then there would still be a failure to consult. However, it should be noted, that the obligation to consult under section 188 is not to follow through on the terms of an agreement that might have been reached, which in part, is Mr Hindle’s complaint, or indeed, to actually reach agreement or set a specific date for dismissal. The obligation was to consult, “in good time” (but subject to it being certain maximum time periods) and which must include those issues identified in section 188(2), those being(a) to avoid dismissal,

(b) to reduce the number of employees to be dismissed, and

[59]The first two statutory criteria to be considered in any consultation, are ways to avoid dismissal and how to reduce the numbers to be dismissed. It seems to me that this is likely to have taken place. As to mitigating the consequences of dismissals, it seems to me that proposals to transfer individuals to Coventry are likely to come within this requirement.

[60]Ultimately, however, the evidential burden is upon the Claimant to establish its claim. On the evidence before me, I am not satisfied on the balance of probability that there was indeed a failure on the part of the First Respondent to consult, or properly consult, in respect of Birmingham.

[61]The evidence did not specifically address each of the written consultation requirements in section 188(4). Again, I expect it is likely some aspects of these requirements were carried out, but this would be more likely than not in my view, as a prelude to agreements being reached for redundancy and/or agreements to transfer to Coventry. There is no evidence as to what written information was provided in respect of Birmingham and Mr Hindle did not suggest no such information was given.

[62]In respect of Birmingham, I am not satisfied that, on the balance of probability, there was a failure to consult, or indeed, carry out a proper consultation. The claim for a protective award in respect of the Birmingham establishment therefore fails. (d) For what period should the protective award be made?

[63]Having fund that there was no consultation at all in respect of Coventry, and taking account of the Radin factors, noting as I do, that the award is a sanction for non-compliance and that I must do what I consider to be just and equitable, I take 90 days as being the starting point and given the absence of any basis of mitigation in respect of that site, I award the full 90 days period.

[64]As to the specific period, I proceed on the basis that the dismissals took place on 12 May 2020 and that the protective award is then for a 90 day period thereafter. This is in respect to both the Unite the Union and GMB the Union bargaining units at the Coventry establishment.