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	United Kingdom Employment Appeal Tribunal
You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> MSF v. Refuge Assurance Plc & Anor [2002] UKEAT 1371_99_1502 (15 February 2002) URL: http://www.bailii.org/uk/cases/UKEAT/2002/1371_99_1502.html Cite as: [2002] UKEAT 1371_99_1502, [2002] 2 CMLR 27, [2002] IRLR 324, [2002] ICR 1365, [2002] Emp LR 767

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APPEARANCES

 

For the Appellant	MR JOHN HAND QC (of Counsel) Instructed By: Messrs Thompsons Solicitors Richmond House Rumford Place Liverpool L3 9SW
For the Respondents	MR NICHOLAS UNDERHILL QC And MR BRIAN NAPIER Instructed By: Mr N Dent Messrs Simmons & Simmons Solicitors 21 Wilson Street London EC2M 2TX


 


MR JUSTICE LINDSAY (PRESIDENT):

1. This appeal from the Employment Tribunal at Manchester is concerned with the duty of employers to consult where significant redundancies are proposed. We shall need to look in some detail at section 188 of the Trade Union and Labour Relations (Consolidation) Act 1996 ("TULRA") and to the provisions of Directives as to collective redundancies. The applicant below was the MSF Union, which appears before us, as appellant, by Mr Hand Q.C.; it argues that such consultation as there was in this case failed to comply with the statute and failed to satisfy the Directive. The respondents below and here are two large employers which merged and whose merger led to many redundancies. They appear before us by Mr Underhill Q.C. leading Mr Napier. The employers succeeded below; the Tribunal held that sec. 188 had not been breached and MSF's claim was accordingly dismissed. MSF appeals.
2. Whilst the questions with which we are required to deal are largely ones of construction they cannot be usefully posed without a chronological approach to the background of fact and it is that with which we will first deal.
3. Before August 1996 the two respondents as separate groups of companies headed by Refuge Assurance plc ("RA") and United Friendly Insurance plc ("UFI"), each with its own head office, carried on their respective businesses in what is called "Home Sector" of the life assurance market, a sector in which business is chiefly obtained by representatives of the insurance company visiting homes and knocking on doors. The two groups had two respective field staffs, who did that work, each operating out of a network of branch offices and with each member of the field staff assigned to some particular branch office. The employees of RA and UFI included numerous members of MSF.
4. In May to July 1996 there were talks between RA and UFI. Their approximate staff numbers were discussed between them. A rough idea for a merged structure was discussed. It would lead, if adopted, to a great reduction in jobs over the next 2 or 3 years but the jobs to be lost were not identified.
5. On 8th August 1996 there was short advanced notice given to MSF of the press announcement to be made on the same day, the two Boards of Directors having by then reached agreement on the terms of a proposed merger. The proposals announced included that UFI's head office at Southwark would be closed and that the head office of the merged companies was to be at RA's Wilmslow head office. Over 2 to 3 years of integration, it was said, there would be a reduction of employees of around a quarter, as far as possible to be achieved through voluntary redundancies "although the need for some compulsory redundancies cannot be ruled out". At that time the two groups separately employed over 7000 people.
6. On 15th August 1996 there was a previously scheduled formal meeting between RA and the Unions representing its employees (of whom MSF was one) and at its end there was a brief discussion as to the merger. On 22nd August there was a meeting between UFI and MSF to discuss the package to be offered to such of the staff at UFI's Southwark office as were willing to move to Wilmslow. On 4th September 1996 there was the first formal meeting after the press announcement between the employers and the branch of MSF which dealt with them. By 12th September 1996 MSF had complained about a failure of the companies to have consulted the Union earlier and about the manner in which the announcement had been made. MSF were told that an "Integration Steering Group" (the "ISG") had been established to oversee the preparation of proposals for the merger. MSF did not wish to be joined in the ISG nor did it complain of exclusion from it. The ISG set to work.
7. On 16th October 1996 RA's shareholders approved the merger, which then became unconditional. It has to be said that there were few findings below as to the precise form the merger took, in terms of company structures and under company law, and there was no enthusiasm before us for investigating that. All parties were content to speak merely of a "merger".
8. Both RA and UFI kept their employees fully informed of the progress of the merger by way of circulation of "in-house" newsletters, copies of which were sent to MSF and the contents of which were discussed at meetings with MSF.
9. On 9th December 1996 a "Closure Agreement" was made between MSF and the companies setting out the terms agreed as to relocation and redundancy consequent upon the closure of UFI's Southwark head office. The number of staff who would be relocated at Wilmslow was not discussed.
10. On 14th January 1997 MSF was told that the ISG, by then re-christened "the Fusion Project Team", was working towards an initial presentation on 29th January to the Board of the merged companies. MSF made it clear that it expected that once the framework had been established, a consultation process would be entered into. It was told that consultation with the Union would begin in February 1997; it did not object to that.
11. On 29th January 1997 plans, including those for the structure of the merged sales staff, the number of branch offices, the number of employees to be retained in the field staff, as to the structure of the Wilmslow (merged) Head Office and the probable number of redundancies at Southwark were put to the merged Board and were approved in principle.
12. On 18th February 1997 the plans thus approved were put to MSF and to the Unions. There was discussion in some detail. MSF made counter-proposals and the companies showed themselves willing to countenance them. Some were agreed there and then, some needed reference back to the Board. MSF did not object to or question the merger itself, or the closure of Southwark, the structure proposed for the field staff or the new head office function at Wilmslow.
13. On 19th February 1997 there were 2 early redundancies at Southwark.
14. On 17th March 1997 the companies sent form HR1 (to which we shall return below) to the Department of Trade and Industry; a covering letter set out a number of presumptions on which the HR1 form was based including that there would be a 30% reduction in the then current number of sales staff and a 45% reduction in field administrative staff.
15. On 31st March 1997 the first redundancy at Southwark consequent on the merger took place, followed in July 1997 by the majority of the redundancies which occurred there. Field staff redundancies were spread, the majority occurring in November and December 1997. By the end of the merger and integration exercise a total of 1777 had been made redundant.
16. On 30th March 1998 MSF presented its IT1 for "Failure to consult for the purpose of redundancies".
17. The hearing at Manchester was spread over 7 days from 10th May 1999 to 18th June 1999, the last 2 days being devoted by the Tribunal, which was under the Chairmanship of Mrs C. Parker, to its own discussions in Chambers.
18. The Tribunal's unanimous decision, sent to the parties on 17th September 1999 was:-

"Each of the respondents consulted in good time with the Applicant Trade Union in accordance with the statutory requirements so to do so under s. 188 [TULRA] and [MSF's] claim in relation thereto is hereby dismissed."

On 28th October 1999 MSF lodged its Notice of Appeal. By a Respondent's Answer of 4th January 2000 RA and UFI raised two extra issues, beyond those relied on by the Tribunal, to support the Tribunal's decision.

19. The domestic legislation provisions with which we are concerned are those applicable to mid-1996 and early 1997. TULRA as currently printed contains several amendments made since then and it is thus convenient to use Butterworths Employment Law Handbook 7th Edn, which gives the provisions as at 6th June 1996. TULRA then read, as far as material for our immediate purposes, as follows:-

"188. Duty of employer to consult ..... representatives

(1) Where an employee 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 so dismissed.

(1A) The consultation shall begin in good time and in any event -

(a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 90 days, and

(b) otherwise, at least 30 days,

before the first of the dismissals takes effect.

(1B) For the purposes of this section the appropriate representatives of any employees are -

(a) employee representatives elected by them, or

(b) if the employees are of a description in respect of which an independent trade union is recognised by the employer, representatives of the trade union,

or (in the case of employees who both elect employee representatives and are of such a description) either employee representatives elected by them or representatives of the trade union, as the employer chooses.

(2) The consultation shall include consultation about ways of -

(a) avoiding the dismissals,

(b) reducing the numbers of employees to be dismissed, and

(c) mitigating the consequences of the dismissals,

and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives.

(3) ........

(4) For the purposes of the consultation the employer shall disclose in writing to the [appropriate] representatives -

(a) the reasons for his proposals,

(b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant,

(c) the total number of employees of any such description employed by the employer at the establishment in question,

(d) the proposed method of selecting the employees who may be dismissed,

(e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect [and

(f) the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed].

(5) That information shall be [given to each of the appropriate representatives by being delivered to them], or sent by post to an address notified by them to the employer, or [in the case of representatives of a trade union] sent by post to the union at the address of its head or main office.

(5A) ..........

(6) ..........

(7) If in any case there are special circumstances which render it not reasonably practicable for the employer to comply with a requirement of subsection [(1A), (2) or (4)], the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances.

.....................

(7A) ...........

(8) This section does not confer any rights on a trade union, [a representative] or an employee except as provide by sections 189 to 192 below."

20. Sections 189 of TULRA provides:-

"189. Complaint .... and protective award

(1) Where an employer has failed to comply with any requirement of section 188, a complaint may be presented to an industrial tribunal on that ground -

(a) .............

(b) in the case of a failure relating to representatives of a trade union, by the trade union."

21. There is a bar on complaints made either too early or late in section 189 (5) with which we are not concerned and section 189 (6) provides:-

"(6) If on a complaint under this section a question arises -

(a) whether there were special circumstances which rendered it not reasonably practicable for the employer to comply with any requirements of section 188,

(b) whether he took all such steps towards compliance with that requirement as were reasonably practicable in those circumstances,

it is for the employer to show that there were and that he did."

22. Between them the parties before us raise a number of inter-related issues but that regarded as most important by each may be dealt with under the next heading.

In good time?

23. As will be seen, the statute creates no obligation to consult earlier than the point at which the employer "is proposing to dismiss" the appropriate number at one establishment within the specified period or less - section 188 (1). The consultation is required to be "about the dismissals" and to be with those who represent employees "who may be so dismissed". Subsection (1A) requires that the consultation "shall begin in good time" and, where the employer is "proposing to dismiss 100 or more" at least 90 days before "the first of the dismissals takes effect". The consultation has to include ways of avoiding the dismissals (subsection (2)) and disclosure is required to be made by the employer in writing as to the aspects of his proposals as set out in subsection (4).
24. The Tribunal held:-

"The words "proposing to dismiss" [do] not mean "thinking about" dismissal. They mean that the employer has reached a stage where the employer has proposals to make, which proposals may change in the light of counter-proposals made by the Trade Union, employees or employee representatives. There is no duty to consult before the employer has formulated its own proposals ..... There is a distinction to be made between, on the one hand, an employer, at its managerial level, formulating and reaching provisional agreement on a business plan, even when that business plan may have the likely consequence of redundancies at some time in the future for certain classes of employees, and, on the other hand, the employer treating a proposal to dismiss as a consequence of adopting a certain plan. Under s. 188 an employer is able to formulate a business plan without having to consult the Trade Union ....."

25. Mr Hand argues that that view is in error of law; the duty to consult is triggered, he argues, by nothing more than a contemplation of collective redundancies. The Act, he says, must, if possible, be construed to accord with the purposes of the Directive and the Directive shews that contemplation, a stage earlier than proposal, suffices to require consultation to begin.
26. This argument requires us to look at the Directive and to look not at the present 98/59/EC (which took effect from 2nd September 1998) but at 75/129 as amended by 92/56.
27. Article 1 of 75/129 as amended provides:-

"Article 1

1. For the purposes of this Directive -

(a) "collective redundancies" means dismissals effected by an employer for one or more reasons not related to the individual workers concerned where, according to the choice of the Member States, the number of redundancies is -

- either, over a period of 30 days -

(1) at least 10 in establishments normally employing more than 20 and less than 100 workers;

(2) at least 10 per cent of the number of workers in establishments normally employing at least 100 but less than 300 workers;

(3) at least 30 in establishments normally employing 300 workers or more;

- or, over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question;

(b) ........

2. This Directive shall not apply to -

(a) collective redundancies effected under contracts of employment concluded for limited periods of time or for specific tasks except where such redundancies take place prior to the date of expiry or the completion of such contracts;

(b) workers employed by public administrative bodies or by establishments governed by public law (or, in Member States where this concept is unknown, by equivalent bodies);

(c) the crews of sea-going vessels;

(d) ...........

Article 2

1. Where the employer is contemplating collective redundancies, he shall begin consultations with the workers' representatives in good time with a view to reaching an agreement.

2. These consultations shall, at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences by recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining workers made redundant.

Member States may provide that the workers' representatives may call upon the services of experts in accordance with national legislation and/or practice.

3. To enable workers' representatives to make constructive proposals, the employer shall in good time during the course of the consultations -

(a) supply them with all relevant information and

(b) in any event notify them in writing of -

(i) the reasons for the projected redundancies;

(ii) the number and categories of workers to be made redundant;

(iii) the number of categories of workers normally employed;

(iv) the period over which the projected redundancies are to be effected;

(v) the criteria proposed for the selection of the workers to be made redundant in so far as national legislation and/or practice confers the power therefor upon the employer;

(vi) the method for calculating any redundancy payments other than those arising out of national legislation and/or practice.

The employer shall forward to the competent public authority a copy of, at least, the elements of the written communication which are provided for in the first subparagraph, point (b), subpoints (i) to (v).

4. .............

Article 3

1. Employers shall notify the competent public authority in writing of any projected redundancies.

[However, Member States may provide that in the case of planned collective redundancies arising from termination of the establishment's activities as a result of a judicial decision, the employer shall be obliged to notify the competent public authority in writing only if the latter so requests.]

This notification shall contain all relevant information concerning the projected collective redundancies and the consultations with workers' representatives provided for in Article 2, and particularly the reasons for the redundancies, the number of workers to be made redundant, the number of workers normally employed and the period over which the redundancies are to be effected.

2. Employers shall forward to the workers' representatives a copy of the notification provided for in paragraph 1.

The workers' representatives may send any comments they may have to the competent public authority.

Article 4

1. Projected collective redundancies notified to the competent public authority shall take effect not earlier than 30 days after the notification referred to in Article 3 (1) without prejudice to any provisions governing individual rights with regard to notice of dismissal.

Member States may grant the competent public authority the power to reduce the period provided for in the preceding subparagraph.

2. The period provided for in paragraph 1 shall be used by the competent public authority to seek solutions in the problems raised by the projected collective redundancies.

3. Where the initial period provided for in paragraph 1 is shorter than 60 days, Member States may grant the competent public authority the power to extend the initial period to 60 days following notification where the problems raised by the projected collective redundancies are not likely to be solved within the initial period.

Member States may grant the competent public authority wider powers of extension.

The employer must be informed of the extension and the grounds for it before expiry[ of the initial period provided for in paragraph 1.

4. ............"

28. The form "HR1" (as sent to the DTI on the 17th March 1997) is the form used within this jurisdiction as the form intended to satisfy Article 3 (1).
29. First we will look at 75/129 untutored by authority. It is notable that the "good time" referred to in Article 2 (1) (the French version, Mr Hand tells us, is "en temps utile") is not a good time before it is contemplated that the redundancies will begin but "in good time with a view to reaching agreement". It cannot have been contemplated that the obligation to consult could be escaped altogether by an obdurate employer or Union indicating from the outset that agreement would be totally impossible. As we interpret the scheme of the Directive the employer, once he "contemplates" collective redundancies (and we will return to "contemplate" later), has to form a view on two things. The first is that he has to put a date to when the collective redundancies which he is contemplating would be likely to begin to take effect if adequate negotiations with respect to them were to take no more time than could then reasonably be expected, were such negotiations to take place with willingness and good faith on both sides, both sides moving towards an agreement of a kind which the employer then contemplated as possible. That exercise provides him with what one might call a contemplated collective redundancy date.
30. Secondly (although it may, with the first step described above, form part of one integrated decision-making process) the employer has to form a view as to how long (given willingness and good faith on both sides and given that agreement has to be taken to be at least possible) it could reasonably be expected to take to negotiate an agreement covering at least the minimum subjects specified in Article 2 (2). That exercise would provide the employer with a number of days. As we read it, the scheme of the Directive then requires a jobbing backwards such that consultation under the Directive is required to begin not less than that number of days before the contemplated collective redundancy date.
31. The Directive also seems to reflect a distinction between an earlier and perhaps more amorphous stage - "contemplation" of redundancies - and later more definite stages, first "projected" redundancies - see Article 2 (3) (b) (i) and (iv), Article 3 (1), Article 4 (1) and then, possibly yet closer to firmness, "workers to be made redundant" Article 3 (b) (ii) and (v).
32. Such an interpretation would in our view give effect to the ordinary meaning in English of "contemplate" as "having in view, taking into account as a contingency" - see the Shorter Oxford English Dictionary. It would not fall foul of the detailed requirements of Article 2 (3) as those are not necessarily required to be supplied to the Union at the commencement of consultations but only during their course. The consultation, of course, could be such that one facet - for example the number of persons to be made redundant - could become firm at a point at which others - for example the period over the redundancies would operate - were still a matter for further consultation or negotiation. It would have been simple enough for the Council to have begun Article 2 (3) with words such as "upon such contemplation" but it did not do so; one cannot therefore point to the contents of Article 2 (3) and use their specificity as an indication that "contemplation" in Article 2 (1) must mean a stage not earlier than when thought about such details of the redundancy in mind could be given either in writing or at all.
33. Thus far we see no reason not to give the word "contemplation" in the Directive a meaning reflecting a relatively early stage in the decision process, one at which a collective redundancy falling within the meaning of the Directive was no more than a thing which the employer had in view, something he was taking account of as a contingency.
34. Mr Hand then took us to authorities throwing light on the Directive. In Dansk -v- H. Nielsen & Son [1985] ECR 553, Advocate General Lenz at p. 557, commenting on the original Directive and relying on the distinction between contemplation and projection, gave his opinion that an employer has to give notice to the competent authority:-

"..... if he plans to make collective redundancies, whereas representatives of the workers must be consulted at an earlier stage."

The judgment of the European Court of Justice at p. 563, dealing with a case where the employer had not contemplated redundancies at all (although he should have done) again distinguished between contemplated and projected redundancies, saying that consultation with the Unions was obliged to be done when the redundancies were contemplated. The case does not greatly illuminate what "contemplation" involves.

35. In Hough -v- Leyland Ltd [1991] ICR 696 EAT a comparison between the effects of the domestic legislation and the Directive proved to be unnecessary. Knox J. said (with our emphasis):-

".... We are not persuaded that the Directive requires any construction to be adopted of the words of section 99 (1) "an employer proposing to dismiss as redundant an employee" which would require a later stage in the employer's decision-making process to be identified than section 99 (1) in the context of the Act of 1975 alone would require. Whether or not an earlier stage would be appropriate does not arise for decision."

He then referred at p. 707 to the French language version of Article 2, beginning "Lorsque l'employeur envisage d'effectuer", adding that the English version of Article 2, using the word "contemplate":-

" seems to us to capture the flavour of "envisage" very well since it reflects the literal as well as the metaphorical sense."

Although obiter that remark gives further support to a distinction between an earlier contemplation and later projection.

36. A comparison between the Directive and the domestic legislation arose again in Re Hartlebury Printers Ltd and others (In Liquidation) [1992] ICR 559. As had been the case in Hough supra, the appropriate domestic legislation was not section 188 but its then less-developed predecessor, section 99 of the Employment Protection Act 1975. That section begins with similar words to section 188, namely "an employer proposing to dismiss as redundant ...". In Hartlebury at p. 568 Morritt J., after noting the distinction in the Directive between contemplated and projected redundancies and the domestic provision in section 99 to an employer "proposing to dismiss" continued:-

"The Union contends that both those sections should be construed to give effect to the Directive so that the duty under section 99 arises when an employer has redundancies in contemplation. That it is the duty of the Court, if possible, to construe United Kingdom legislation so as to comply with the United Kingdom's obligations under an EEC Directive is not in doubt. But that must be achieved, if at all, by proper processes of construction, not so far as the Court is concerned by the equivalent of legislation.

Dealing first with the Directive, it seems to me that the word "projected" in Article 3 is used in the sense of "then intended" after the processes of consultation with the Union had been completed."

That is so but equally Article 2 (3) contemplates that there may be "projected redundancies" - see Article 2 (3) (b) (i) and (iv) - whilst consultation is still in course. Reverting to the quotation from Hartlebury, Morritt J. continued:-

"Thus the contemplation referred to in Article 2 (1) is something less than intention. Nevertheless, the range of mental states included within the word is wide. It would extend from merely "thinking about" to "having in view or expecting". In the latter sense, but not the former, the word would equate with the verb to propose."

For our part we would respectfully query whether to "have in view or expect" truly equates with "to propose". To continue with the citation:-

"Approaching that problem from the wording of section 99 I think it is clear, not least from subsection (5) that the phrase "an employer proposing to dismiss as redundant" cannot include one who is merely thinking about the possibilities of redundancies. Thus I cannot construe the word "proposing" to embrace the full range of the possible meaning of the word "contemplating" but I can construe "contemplating" in a sense equivalent to "proposing". Article 2 (1) of the Directive has not, so far as I know, been construed by the European Court of Justice. Thus I assume, because it is for the Court of Justice and not for me to decide, that section 99 does comply with the United Kingdom's obligations."

Dansk, of 1983, was not cited to Morritt J..

37. The process followed in Hartlebury may be vulnerable as representing a construction of the Directive so as to make it consistent with the domestic legislation rather than, as is required, the other way round. However, ultimately Morritt J. merely assumed the point before him. Hartlebury cannot in our view be taken to be an authority for a proposition that the word "contemplate" in the Directive points only to some state of mind more nearly resolved than something merely in view or taken into account as a contingency. It has to be remembered, too, that in the Directive the word "contemplate" cannot be quite as loose as "merely thinking about" the possibilities of redundancy in, for example, the loose way in which any employer, concerned about his costs, may reflect on the possibility of employing fewer. The employer's "contemplation" has, as an irreducible minimum, at least to be to that degree of specificity as would satisfy, as to numbers, periods and establishments, the requirements of whichever of the two described forms of "collective redundancy" the Member State had chosen and as would exclude redundancies falling within Article 1 (2).
38. Mr Hand next took us to Reg. -v- British Coal Corporation ex parte Vardy [1993] ICR 720 in the Queen's Bench Divisional Court. None of Dansk, Hough or Hartlebury was cited to the Court. Glidewell L.J., with whom Hidden J. agreed, turned to section 188 in the Directive at pp. 752-3. Although one might quarrel with the observation that under the Directive consultations are to be begin as soon as the employer contemplates redundancies, which is not what the Directive says, that does not detract from the strength of the following passage:-

"..... In my view the difference between the wording of the Directive and the wording of section 188 of the Act 1992 is such that the section cannot be interpreted as having the same meaning as the Directive.

I say this because in the Directive consultation is to begin as soon as an employer contemplates redundancies, whereas under the Act of 1992 it only needs to begin when he proposes to dismiss as redundant an employee. The verb "proposes" in its ordinary usage relates to a state of mind which is much more certain and further along the decision-making process than the verb "contemplates;" in other words, the Directive envisages consultation at an early stage when the employer is first envisaging the possibility that he may have to make employees redundant. Section 188 applies when he has decided that, whether because he has to close a plant or for some other reason, it is his intention, however reluctant, to make employees redundant. Moreover, section 188 of the Act 1992 contains no words equivalent to those contained in Article 2 (2) of Directive (75/129/EEC)."

As had Knox J., Glidewell L.J. saw "envisage" as a convenient synonym for "contemplate" in the Directive.

39. In Griffin -v- South West Water Services Ltd. [1995] IRLR 15 at 23 Blackburne J. turned to the question of at what point under the Directive the obligation to consult arose. Counsel for the Union in that case had contended that the words "is contemplating" in Article 2 (1) referred to an earlier stage than when the proposals were formulated. Blackburne J. continued, after indicating, in effect, that what followed was obiter, as follows:-

".... the obligation to consult only arises when the employer's contemplation of redundancies has reached the point where he is able to identify the workers likely to be affected and can supply the information which the Article requires him to supply .... I cannot see that the Article requires the employer to embark upon the process of consultation at any particular moment, much less as soon as he can be said to have in mind that collective redundancies may occur. The essential point to my mind, is that the consultation must be one where, if they wished to do so, the workers' representatives can make constructive proposals and have time in which to do so before the relevant dismissal notices are sent out. This process cannot sensibly begin until, as it seems to me, a point has been reached where the information identified in Article 2 (3) is available."

Blackburne J. found Hough and Hartlebury supra to be of no assistance on the point. He recognised that his view of the time when consultation was required to begin was at odds with the view expressed by Glidewell L.J. in Vardy supra. We would respectfully differ from Blackburne J. because, given that the information described in Article 2 (3) is to be supplied during the course of the consultation rather than being expressed to be available and supplied at its very start, we see nothing to preclude consultations beginning before all the information in Article 2 (3) (b) is available. It is possible to regard Article 2 (3) as obliging the employer to supply "all relevant information" in whatever form as it comes to hand under Article 2 (3) (a) and equally, under (b), then to supply information in writing as and when it is possible to do so in the course of the employer moving from contemplation to projection, whether as a result of or independently of consultations with the Union.

40. Our view of these domestic authorities (none of which binds us) does not require us to depart from the conclusion expressed above as to the point of time at which, under the Directive, consultation has to begin. Whilst it is not necessarily the case that the beginning of consultation has to coincide with the employer's first contemplation of collective redundancies, it is at that point that he must turn his mind to the "jobbing back" exercise that we described in our paragraph 30 above. That jobbing back then identifies when consultation should begin in cases where the Directive applies.
41. As to that point of first contemplation, in our view it occurs, for the purposes of the Directive, (to combine our description of the irreducible minimum spoken of in paragraph 37 above and Glidewell L.J.'s dictum in Vardy supra) when the employer first so envisages the possibility that he may have to make employees redundant that he then has in view, at least as a contingency, that the numbers, the period and the establishment or establishments involved would, if it came to pass, make the exercise amount to a collective redundancy.
42. MSF is not in a position in this case to seek the direct enforcement of the Directive but it is able to invite us to construe section 188 so as to accord with the Directive if that can be done without distorting the meaning of the domestic legislation. However, in our view, if our construction of the requirements of the Directive is right, then section 188 cannot be made to accord with it without distortion. Pace Hartlebury supra, it would distort the section's "is proposing to dismiss" to make it akin to the Directive's "is contemplating". We respectfully adopt Glidewell L.J.'s view in Vardy supra that "proposes" relates to a state of mind which is much more certain and further along the decision-making process than the verb "contemplate" - see also Association of Pattern Makers and Allied Craftsmen -v- Kirvin Ltd. [1978] IRLR 318 EAT at para 9 and see obiter in Scotch Premier Meat Ltd. -v- Burns [2000] IRLR 639 at paras 14 and 15. There Lord Johnston giving the judgment of the EAT inclined to the view that it was extremely difficult if not impossible to construe "propose" as wide enough to cover "contemplation"; he added:-

"What concerns us is whether the less can include the greater, while the opposite is certainly the case."

43. Moreover, section 188's predecessor, section 99 of the 1975 Act, which was indistinguishable from section 188 in this respect, has been construed to require that the material that has to be disclosed in writing to the Union (section 99 (5); section 188 (4)) has to be disclosed before the consultation begins - see E. Green & Son (Castings) Ltd. and others -v- ASTMS [1984] ICR 352 EAT at 360 d. It would, on that basis, distort section 188 were one either to add to it the general obligation to supply information (whether orally or in writing) in good time during the course of the consultations that is found in Article 2 (3) (a) or the requirement to supply information in writing in good time during the course of the consultations found in Article 2 (3) (b). Nor does the Directive have any equivalent to section 188's inescapable periods of 90 days and 30 days as specified in section 188 (1A). We shall deal below with how the Directive differs from section 188 as to "establishments" but, all in all, in our judgment section 188 cannot be construed to accord with the Directive.
44. That being so, but this not being a case where, on that account, the domestic provision can be disapplied by us, we are left with the task of seeing whether the Employment Tribunal erred in law, that question to be approached on the basis that, on a straightforward construction of the language of section 188, a "proposal" to dismiss within it emerges, if at all, at a stage later than the "contemplation" of redundancies. Of the meanings of "to propose" given by the Shorter Oxford English Dictionary perhaps the most fitting in context is "to lay before another or others as something which one offers to do or wishes to be done".
45. The Employment Tribunal held that under section 188 there was no duty to consult before the employer had formulated its own proposals; there was a distinction to be drawn between the employer at a management level formulating a plan that may have the likely consequence of redundancies and his making a proposal to dismiss. There was no obligation to consult before the management knew what it may want to do. The Employment Tribunal said:-

"We find that proposing to dismiss means more than a mere contemplation of, or consideration of, dismissal during the formulation and adoption of a business plan but is something less than a final decision."

A little later the Tribunal continued:-

"At what point in time a proposal is made, and when the duty to consult arises, depends upon the facts in each case."

Later they added:-

"There is no duty to consult with the Trade Union until, at the very earliest, the Board of Directors has given its approval to the proposal. Until that point in time the management has been formulating business plans to put to the Board. This is so even where the Board of Directors has given its approval for the merger discussions to go ahead."

There may be cases where, by delegation from the Board, the decision whether the employing company proposes to dismiss has been moved from the Board to some other body such as the Human Resources Department but, absent some such delegation and bearing in mind that it is the "employer" who has to be proposing to dismiss in order to trigger section 188, we are unable to describe any of the Tribunal's conclusions we have cited above as in error of law where only the construction of section 188 is in play.

46. At the Tribunal the matter thus became one of applying those correct conclusions on the law to the facts of the case.
47. The Employment Tribunal approached the task by looking at the separate components of the employers' proposals.
48. As to the closure of UFI's Southwark head office, the duty to consult began, held the Tribunal, on the announcement of the merger on the 8th August 1996, which was as soon as the Board of Directors had approved the merger plans and as soon as the closure of that head office had become, in the Tribunal's view, unconditional. To insist that it could not have been unconditional until shareholder approval was given on 16th October 1996 would not avail MSF. The Tribunal held that consultation did in fact begin upon the announcement of the merger and held also that the first scheduled redundancy did not take place until the 31st March 1997. The inescapable 90 day period of section 188 (1A) was in any event exceeded. The Tribunal held:-

"We find that the respective employers consulted with the applicant, they considered any counter-proposals which the applicant made. We find that consultation did begin in good time with a view to reach an agreement under section 188 (2) (a)."

We see no error of law there.

49. As for the reorganisation of the field staffs, a proposal to dismiss within section 188 did not emerge, held the Tribunal, until the 29th January 1997, when the Board approved in principle the plan put to it by the ISG. Consultation began, held the Tribunal, on the 18th February 1997 and the earliest redundancy took effect in July 1997. Again the 90 days were exceeded. The Tribunal held that in the circumstances the consultation was begun in good time within section 188 (1A).
50. Similarly, with respect to the reorganisation of the administrative functions of the Wilmslow head office, the Tribunal held that there was no "proposal" within section 188 until the 29th January 1997 and, again, that consultation began on the 18th February 1997. The Tribunal held that in the circumstances that was "in good time".
51. We see no error of law in these conclusions of the Tribunal and so far as the appeal consists of an attack on the Employment Tribunal's conclusions under the "in good time" heading, it fails.

The Establishment issue

52. As will have been seen, Article 1 (1) (a) of the Directive gives Member States a choice of 2 types of collective redundancy which they may adopt in their domestic legislation. The second is one which is irrespective of the number of workers normally employed in the establishments in question. However, section 188, whilst appearing to take the second choice (redundancies of at least 20 persons over 90 days) speaks of the redundancy of 20 or more being "at one establishment". In this respect, too, it appears to us to differ from the Directive to a degree irremediable by construction. Again, given that MSF are neither able to enforce the Directive nor to disapply the section, we are left with the task of applying a straightforward construction of the language of the section to the facts. Thus there arises the question of what is "an establishment". The question is important in the case before us as field staff workers worked in relatively small units which, if each was separately regarded as an establishment, would effectively disapply section 188 simply by reason of the smallness of the branches concerned and the thin spread of redundancies over a large number of them.
53. The European Court of Justice has ruled on the word "establishment" in this context in Rockfon A/S -v- Specialarbejderforbundet I Danmark [1996] ICR 673 where, at paragraphs 32-34 one finds:-

"32. The term "establishment" appearing in Article 1 (1) (a) of Directive (75/129/EEC) must therefore be interpreted as designating, depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties. It is not essential, in order for there to be an "establishment", for the unit in question to be endowed with a management which can independently effect collective redundancies.

33. That interpretation is supported by the fact that the Commission's initial proposal for a Directive uses the term "undertaking" and that that term was defined in the last sub-paragraph of Article 1 (1) of the proposal as "local employment unit". It appears, however, that the Council decided to replace the term "undertaking" by the term "establishment", which meant that the definition originally contained in the proposal and considered to be superfluous was deleted.

34. The answer to the second part of the preliminary question must therefore be that the term "establishment" appearing in Article 1 (1) (a) ........ must be understood as meaning, depending on the circumstances, the unit to which the workers made redundant are assigned to carry out their duties. It is not essential, in order for there to be an "establishment" for the unit in question to be endowed with a management which can independently effect collective redundancies."

The Employment Tribunal cited Rockfon; it held that each branch office was a separate costs centre and that each branch office manager was the direct line manager of the field staff assigned to that particular branch office. The word "assigned" is important given its rôle in the decision in Rockfon. The Tribunal held that each member of the field staff was assigned to a particular branch office as his or her place of work. They held that each member of the field staff was, in each of the two respondent companies, assigned to a branch office. Despite that the Tribunal concluded that:-

"The establishment in this case is not the branch office."

They also concluded:-

"In all the circumstances of this case the establishment is the entire field staff of each respective employer."

This issue gives rise to one of the points in the Respondents' cross-appeal. There is, if we may say so, very good industrial-relations sense in the Tribunal's view; it would hardly conduce to good industrial relations were an employer who was contemplating or even proposing large scale redundancies in an organisation which had many branches to be able to escape the obligation to consult by his indicating that, as yet, he could not say whether 20 or more would be made redundant at any one establishment. However, the fact that at the point of proposal in the cases before us there remained uncertainty on such issues does not seem to us to justify a departure from the Rockfon meaning, involving therefore that one is to look to see, in respect of the separate units to which the workers proposed to be made redundant were assigned to carry out their duties, whether at any one such establishment 20 or more were proposed to be dismissed within the specified period. Consistently with the meaning of "establishment" derived from Rockfon, until it is the case that the proposal is that 20 or more shall be dismissed at any one establishment no obligation to consult arises under section 188. The employers' cross-appeal succeeds on this issue.

54. We were referred to a number of authorities on the meaning of the word "establishment" in our domestic legislation but we shall not deal with them at any length, firstly because in section 188 the word should, if possible, be given the meaning ascribed to the same word in the Directive by Rockfon supra. Secondly, we are unconvinced of the value of cases looking at the word in other statutory contexts. Thirdly, in any event we are unconvinced that these domestic authorities lead to a meaning that differs from the Rockfon meaning - see in particular Lord Advocate -v- Babcock Wilcox [1972] HoL 1 W.L.R. 488 and Barratt Developments (Bradford) Ltd. -v- UCATT [1978] ICR 319 EAT.

Special circumstances

55. Section 188 (7) gives an employer a qualified ability not to comply with, inter alia, the full obligations to consult under section 188 (1B) (b) where there are "special circumstances which render it not reasonably practicable for the employer to comply". Even where that is shown, the employer, to escape the obligation, must at least have taken "all such steps towards compliance ... as are reasonably practicable in those circumstances". At the Employment Tribunal the companies argued that the requirements of secrecy imposed by the Takeover Code (to which the merger was subject) were a special circumstance. The Employment Tribunal made no finding on this issue. The Takeover Code has not been put before us. Even if the terms of the Takeover Code did amount to special circumstances the companies would need also to show that they had complied with the latter part of subsection (7) but that, again, was an issue on which the Employment Tribunal made no finding and as to which we have no material. In these circumstances we express no view on either part of section 188 (7) save to say that in our view it cannot be simply assumed that disclosure to, say, a senior Union official on the like terms of confidence as would be applicable to the companies' directors would necessarily be so restrictive that it would be completely useless to him and that it would therefore represent a step that need not be taken by the employer, or that such an official would necessarily refuse to accept information on such terms. It is to be noted that Hamish Armour -v- ASTMS [1979] IRLR 24 at para 11 contemplates (without proposing) disclosure to responsible Union officials on a confidential basis.

Conclusion

56. For the reasons we have given, we dismiss MSF's appeal and allow the Employers' cross-appeal as to "establishments". We need not and do not come to any decision as to "special circumstances".