Collective Redundancies and Territorial Jurisdiction

09 January 2019

In a redundancy situation, can an individual ship be an 'establishment' for collective consultation?

Yes, held the Court of Appeal in Seahorse Maritime v Nautilus International.


After a redundancy exercise affecting crews based on ships operating outside Great Britain, the trade union Nautilus sought a protective award for a failure to consult collectively under s188 TULRCA 1992. The issues were whether individual ships could be 'establishments' and whether s188 extended outside Great Britain to the ships. The employer was based in Farnham, Surrey, crew members were from the UK and overseas.

The Court of Appeal held that each ship was an establishment, with assigned crews, noting such decisions are fact-sensitive. At para 30 the judgment gives guidance on establishing the number of employees at an 'establishment': the first question is whether an 'establishment' can be identified, applying the statutory wording and case law. The next question is whether a sufficient number of employees are employed at, i.e. assigned to, that establishment, which may require examining the 'assignment status' of individuals if this is contentious. A third question could be whether the employer proposes to dismiss sufficient numbers to trigger collective consultation.

The second issue was whether s188 extends to ships outside Great Britain. The requirement was finding 'sufficient connection' to Great Britain; the dispute was whether the connection arose from the 'establishment' (i.e. the ship) or the individual employees. The connection is looked at from the establishment, the obligation arises at a collective level, the natural focus falling on the common feature of employment at the same establishment. Looking at the individuals for a connection could mean that some would lack sufficient connection with Great Britain to count towards the numbers required to trigger consultation. On the facts, there wasn't sufficient connection. The Court dismissed the claims without remission.


With thanks to Daniel Barnett’s employment law bulletin for providing this update.