Redundancy: Employers can Breathe a Sigh of Relief

Feb 18, 2015

In light of the recent Advocate General’s opinion on the case of USDAW v Ethel Austin Ltd (the Woolworths case), employers can breathe a sigh of relief when it comes to having to carry out collective consultation. Under current Employment Law, where a Company is making more than 20 redundancies at one establishment, they will be required to undertake a consultation process.

The Woolworths case dates back to 2008, when former employees at Woolworths and Ethel Austin lost their jobs but were not collectively consulted. Unions acting on their behalf brought the case to tribunal, as thousands of staff at both chains claimed they were denied a consultation period due to working in smaller shops, while their employees in larger outlets did receive consultation.

In 2013 the EAT ruled ‘at one establishment’ must be disregarded for collective redundancy involving 20 or more members of staff and Employees at the smaller stores received millions in compensation.

The matter was referred to the Attorney General of the ECJ. The Attorney General’s view was that the EAT got it wrong. He held that an ‘establishment’ is the unit to which the redundant employees are assigned to carry out their duties. Therefore, it is unnecessary to aggregate dismissals across an entire business when determining whether to consult collectively. This decision is a good indication of the ECJs final decision.

However, a word of warning, this is only an opinion and not yet law. Until the ECJ delivers its decision, we advise employers to take a “better safe than sorry” approach when deciding whether to consult collectively so as to avoid liability for protective awards which could be equal to 90 days’ gross pay.

Gary Smith

About the author

Gary Smith

Gary joined Nockolds in 2007 and is a Partner in our Employment Law Team. Before joining the firm Gary studied law at the University of Kent. ...

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