In two Polish references about changing terms and conditions for hospital staff, the European Court of Justice has revisited the question of when consultation about collective redundancies should start.
For UK readers there is little surprising in its ruling that the Collective Redundancies Directive was engaged when two hospital employers in different parts of Poland sought to impose unfavourable changes to staff terms and conditions in order to save money. In one case it was a question of a temporary 15% pay cut and in the other the removal of generous long service payments.
What is more interesting is what the ECJ says about when the collective consultation required by the Directive should have started. That involved interpreting the somewhat vague wording of Article 2 which requires it to begin “where an employer is contemplating collective redundancies”. It is clear from earlier decisions that this must be prior to the decision to dismiss. But how much earlier?
In both these cases the employers sent out notices of amendment, which under Polish law had the effect of terminating the contract of employment if the employees did not accept the amendment. If they failed to object to the amendment by the mid-point of the notice period they were deemed to have accepted it. In one case, but not the other, sending the letters of amendment had been preceded by a period of individual consultation, after which about 20% of the employees accepted the change.
The ECJ has ruled that it should have commenced consultation before sending out the letters of amendment, since “it should reasonably have expected that some employees would not accept the change to their conditions of employment”.
As often with decisions of the ECJ it is not easy to apply this decision to the UK context, since the provisions in the Polish Labour Code about amending contracts of employment have no equivalent in English law. However the broad principle that emerges is that deciding on an action which is likely to lead to a number of dismissals in the future in the ECJ’s view amounts to “contemplating collective redundancies”, even if the precise numbers of actual job losses cannot be ascertained at that point.
In practice in the UK if negotiations about changing terms and conditions fail, imposing them is normally done by a letter of dismissal combined with an offer of re-engagement, which would clearly engage the obligation to consult. However there is more than a hint in these latest decisions that consultation should start at an earlier point, once the idea about imposing compulsory changes to terms and conditions has been formulated.