Thread by @JasonBraier

1/ Carillion Services v Benson (& around 1000 others): the 'special circumstances' exception to the consultation requirements of s.188 TULRCA requires something uncommon/out of the ordinary. Entering compulsory liquidation per se wasn't special
bailii.org/uk/cases/UKEAT…
#ukemplaw

2/ You'll doubtless be familiar with Carillion, the FTSE 100 company which provided a host of facilities management & construction services to the government prior to its liquidation on 15.01.18 & the consequent huge redundancies which followed.

3/ Carillion failed to consult, as required by s.188 TULRCA, but contended s.188(7) came to the rescue. Its case was it only became apparent the company wouldn't survive in the days before entering liquidation. No company of this size had entered liquidation before.

4/ The claimants had contended there was a sufficiently clear intention to enter liquidation a few weeks earlier, whereas Carillion said it was the day before. The ET accepted Carillion's position & found that on 14.01.18 the duty to consult was triggered.

5/ The ET then considered whether the special circumstances defence applied as at 14.01.18, finding Carillion was on a downward path from July 2017 onwards & that the refusal of support on 13-14.01 by the govt & banks to provide further finance wasn't a special circumstance.

6/ The ET found that at the point that the duty was triggered, there was no special circumstance rendering it not reasonably practicable to comply with collective consultation duties, & thus the penalty applied.

7/ The leading case on special circumstances is Clarks of Hove v Bakers Union, where the CA concluded insolvency and its lead up weren't, per se, special circumstances excusing the failure to consult. A sudden disaster would be different from a gradual rundown of the company.

8/ The mainstay of Carillion's appeal was whether an ET errs by limiting its enquiry to the cause of the insolvency when identifying relevant circumstances, noting that even in bad situations there were possibilities of the rescue of going concerns or of TUPE riding to the rescue

9/ These submissions were directed towards trying to persuade the EAT to adopt a more liberal, generous construction of 'special circumstances' than the CA had done in 1978.

10/ The EAT disagreed. It noted the special circumstances test considered in Clarks wasn't limited to insolvency situations & hence held that undermined the argument that the EAT should go against the CA on the basis of the intervening statutory regimes re insolvency situations.

11/ The EAT found the ET correct in not just focusing on the immediate cause of the insolvency in the days before liquidation but on events going back to July '17. The sudden disaster/gradual rundown examples are useful so long as not viewed as a constraining dichotomy.

12/ The EAT considered there to be an illogicality on the 1 hand in arguing for difference between 1978 & now due to the alternative possibilities now on insolvency, & on the other hand the recognition that compulsory liquidation leads to the inevitable dismissal of the workforce

13/ Ultimately the EAT found the ET kept the relevant factors in mind, not limiting itself to the fact of the compulsory liquidation per se, but looking at the events compelling it & their speed & context.

14/ One argument raised by Carillion was that in a case of compulsory liquidation it was impossible to avoid dismissal & hence impossible to comply with a requirement to consult on avoiding dismissals. The EAT was clear that didn't render the circumstance special.

15/ In particular, the EAT pointed out that even if avoiding dismissals was impossible, that didn't render invaluable consultation on mitigating the consequences of the dismissals nor the provision of information requirements under s.188(4).