Insolvency, at least per se, does not amount to a special circumstance exempting an employer from consulting employees on redundancy. Morritt J noted the distinction in the Directive between contemplated and projected redundancies and section 99 to an employer ‘proposing to dismiss’ and said: ‘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.’ . . 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 . . 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.’
Judges:
Morritt J
Citations:
[1992] ICR 559, [1993] BCLC 902
Statutes:
Employment Protection Act 1975 99
Cited by:
Cited – Enron Metals and Commodity Ltd (in Administration) v HIH Casualty and General Insurance Limited ChD 10-Mar-2005
The claimant company sought leave whilst in administration to bring arbitration proceedings against the defendant insurers.
Held: In exercising the discretion given by the section, the court had only to decide whether the claim was so bad that . .
Cited – Krasner v McMath; in Re Huddersfield Fine Worsteds Limited CA 12-Aug-2005
The administrators had adopted the contracts of certain employees, who now claimed that the protective awards should have priority to the expenses of the administration.
Held: The payments did fall within paragraph 99(5) and do not have . .
Cited – MSF v Refuge Assurance Plc, United Friendly Insurance EAT 15-Feb-2002
EAT The EAT considered the employer’s duties to consult on making redundancies. The ET had found that company had satisfied the requirements. The Union argued that the duty to consult arose as soon as . .
Lists of cited by and citing cases may be incomplete.
Insolvency, Employment, European
Updated: 30 April 2022; Ref: scu.225879