We report on a case where the EAT has taken a very uncommercial view about collective consultation on a school closure, as a warning to employers in other collective consultation situations.
This case has mainly been reported as one where “ignorance of the law is no defence”. Indeed, the school governors at St Margaret’s School in Peterborough were completely ignorant of their collective consultation obligations when they closed the school down, but were still penalised.
Had they known what the law is, they are likely to have found themselves in an impossible situation anyway.
Failure to comply with collective consultation rules where more than 20 people are being made redundant, and can result in a punitive award of up to 90 days’ pay for each employee. This is exactly what was awarded in this case.
There has been much debate in recent cases about how early collective consultation should start, and the position is not completely certain. According to the UK Coal Mining case, this is where there is a “fixed, clear, albeit provisional intention” to make redundancies, and according to the Fujitsu case, it is where there is a “strategic decision…compelling the employer to contemplate or plan for collective redundancies”.
In this case, in February 2013, the school governors had made a decision that the school would need to close down if pupil numbers did not improve. By April 2013 it had become clear that numbers would not improve, the decision was made to close the school down. Teachers were told 4 days later that their jobs would be coming to an end the following term. They were entitled to 1 term’s notice.
The EAT held that the school, under both the UK Coal Mining and Fujitsu tests, should have started consultation back in February. The school’s argument was that this would have potentially sparked exodus of pupils if news of the financial situation got out. In response to this, the EAT said that they should have made the teachers keep this confidential.
The school argued that they had to make the dismissals speedily and without consulting collectively, because they would otherwise have had to pay an extra term’s salary. In doing so, they relied on the exception where there are “special circumstances which render it not reasonably practicable” to collectively consult. However, the EAT agreed with the Tribunal that they should not be able to rely on their contractual obligations to get around their obligations.
This case should serve as a warning to employers first, as to how early they need to start collective consultation and, second, as to the limits of the “special circumstances” exception.