07 Jul 2011
Could News Corp face tribunal proceedings for NOTW redundancies?
In addition to its ongoing problems in relation to the hacking investigation, reports of the announcements made to staff on the News of the World yesterday would suggest that News Corporation will soon also have tribunal proceedings on its hands.
It would appear that staff were given notice yesterday, with a suggestion that they will be paid for three months. If this is so, then assuming the reason for the notice is redundancy, News Corporation can expect to be presented with claims for failure to consult in connection with the proposed redundancies and unfair dismissal claims.
Employment legislation includes an obligation upon employers to consult on a range of issues ahead of terminating any employment by reason of redundancy. Where 100 or more staff are proposed to be dismissed, then this consultation must commence at least 90 days before the first dismissal takes effect. This requirement has consistently been interpreted by the courts in recent years as indicating that the consultation must take place, with either trade union representatives or representatives elected for the purpose of consultation by the staff, before notice is given. Simply triggering the notice period and endeavouring to consult in the period between giving notice and the contracts of employment coming to an end will not be sufficient.
Employees are entitled to an award of up to 90 days pay each in the event that their employer is found to have failed to consult. This could be a significant sum, given that the approach of the courts is to assume that the maximum amount of 90 days should be awarded, unless it is equitable to offer less. While News Corporation may seek to argue that commercial realities meant it had no alternative but to close the title, this does not necessarily lead to a decision that the employees must be dismissed immediately by reason of redundancy.
Consideration should properly be given to whether there are alternative vacancies for them and in this context, the rumours that an alternative Sunday title, perhaps The Sun on Sunday, will be launched, will lead to perceptions that the whole process is fatally flawed and thus unfair.
Whilst employees doubtless feel highly aggrieved that they are being dismissed for the sins of their predecessors, ultimately, if their jobs are genuinely ceasing to exist, because of closure of the title, Tribunals will have no power to conclude that the dismissals were for reasons other than genuine redundancy, but they will take issue with the need for such precipitate action in terms of the jobs of the affected employees.