The European Court of Justice (ECJ) has made a ruling on a Finnish collective redundancy case that could affect the decisions of UK employers on when to commence collective consultation about redundancies.

The case of Akavan Erityisalojen Keskusliitto AEK ry and ors v Fujitsu Siemens Computers Oy provides guidance for employers as to when the obligation to conduct collective consultations is triggered in the redundancy procedure.

Although the case was referred by the Finnish High Court, it concerns the meaning of consultation under the relevant European directive, and so it may have an impact on the interpretation of the Trade Union and Labour Relations Act (TULRA), the legislation that implements the directive in the UK.

The European directive states that a collective consultation should be triggered when dismissals are contemplated, while TULRA states that a collective consultation should be triggered by a proposal to dismiss as redundant 20 or more employees within a 90-day period.

A proposal to dismiss 20 or more employees is likely to be more concrete than dismissals that are merely being contemplated. When contemplating dismissals, for example, an employer has yet to determine the exact number of dismissals that may be needed.

In the Finnish case in question, the Advocate General made a ruling earlier this year that appeared to support the interpretation that a more concrete trigger was necessary. He stated that the consultation should be triggered at the moment when the employer intended to make redundancies, or at least foresaw the possibility.

However, the ECJ has now concluded that while the intention to make redundancies is a factor, consultation is actually triggered “once a strategic or commercial decision compelling him to contemplate or plan for collective redundancies” has been made.

This new decision clearly favours the interpretation that the consulting obligation arises at an earlier stage of the decision-making process, putting the emphasis back on the word “contemplate” once again.

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