University and College Union v The University of Stirling

The case concerned the duty under section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 to consult representatives where an employer proposes to dismiss as redundant 20 or more employees at one establishment within 90 days. Two questions arose: whether expiry and non-renewal of a limited term contract (LTC) amount to a dismissal (answer: yes, by virtue of section 95(1)(b) of the Employment Rights Act 1996 read with section 298 of the 1992 Act), and whether such a dismissal can be "for a reason not related to the individual concerned" (the statutory definition of dismissal "as redundant" in section 195(1) of the 1992 Act).

The Supreme Court held that the mere fact that an employee had agreed to an LTC cannot automatically be treated as a reason relating to the individual so as to exclude the dismissal from being "as redundant". Whether non-renewal is a redundancy depends on the true reason for the non-renewal: where the employer’s need for the role ceases (for example, the end of a research project or a teaching module, or the end of temporary maternity or sickness cover), the reason is related to the employer’s business and thus may be a redundancy. If, by contrast, the non-renewal is attributable to the individual’s personal attributes or conduct, it will not be redundancy. The Court allowed the appeal and remitted the remaining factual issues to the Employment Tribunal for determination.

This appeal arose from complaints by the University and College Union that the University of Stirling failed to consult over collective redundancies when a number of employees on limited term contracts were not offered renewed contracts. The University had embarked on collective consultation about compulsory redundancies of permanent staff in 2009 but did not include employees whose fixed-term contracts were to expire during the consultation period. The Union brought complaints and four test cases were selected concerning employees whose LTCs were not renewed.

Procedural history: the Employment Tribunal found that three of the four test claimants had been dismissed "as redundant" while one was not dismissed at all. The Employment Appeal Tribunal concluded that all four had been dismissed but that none had been dismissed "as redundant" ([2012] ICR 803). The Inner House of the Court of Session agreed with the EAT ([2014] CSIH 5, 2014 SLT 352). The Union appealed to the Supreme Court.

Nature of the claim: a complaint under section 189 arising from the employer's alleged failure to comply with the consultation duty in section 188(1) TULRCA 1992; remedies available to a tribunal included a declaration and a protective award in respect of the relevant protected period (sections 189–189(4)).

Issues framed: (i) whether expiry/non-renewal of an LTC counts as a dismissal for the purposes of the consultation duty (answered yes, under section 95(1)(b) Employment Rights Act 1996 and section 298 of the 1992 Act); and (ii) whether such a dismissal is "for a reason not related to the individual concerned" (section 195(1) 1992 Act), i.e. dismissal "as redundant".

Court's reasoning and resolution: the Court rejected the EAT/Inner House approach that the fact of having entered into an LTC was itself a reason relating to the individual that would exclude LTC non-renewals from the redundancy consultation regime. That approach would effectively exclude almost all LTCs from the statutory duty even where the non-renewal resulted from cessation of funding, completion of a project, or the end of cover work — reasons related to the employer’s needs. The Supreme Court emphasised the statutory purpose of the consultation duty (including disclosure of reasons, numbers, selection methods and exploring ways to avoid or mitigate dismissals) and concluded that the appropriate test distinguishes reasons personal to the employee (conduct, capability or suitability) from reasons connected to the employer’s business. The Court allowed the appeal and remitted the remaining factual questions to the Employment Tribunal for determination.

The Court noted the legislative and EU context: the Directive on collective redundancies and the evolution of the UK statutory definition (section 195) were relevant to interpretation, and Parliament had since narrowed the scope of protection in later amendments, but those later changes post-dated these events.

Appeal allowed. The Supreme Court held that expiry and non-renewal of a limited term contract is a dismissal (by reference to section 95(1)(b) of the Employment Rights Act 1996 and section 298 of the 1992 Act) and that the mere fact an employee agreed to an LTC is not automatically a reason relating to the individual such that the dismissal cannot be "as redundant" under section 195(1) of the Trade Union and Labour Relations (Consolidation) Act 1992. Whether a non-renewal is a redundancy depends on the employer’s reasons, and where those reasons are connected to the employer’s business (for example the end of a project or end of cover work) it may be a dismissal as redundant. The case was remitted to the Employment Tribunal to determine the remaining factual issues.

Employment Tribunal (decision on four test cases) -> Employment Appeal Tribunal [2012] ICR 803 (found dismissals but not "as redundant") -> Inner House, Court of Session [2014] CSIH 5, 2014 SLT 352 (approved EAT) -> Supreme Court [2015] UKSC 26 (appeal allowed and remitted to Employment Tribunal).