The European Court of Justice (ECJ) has given its judgment in the long-running case of USDAW v WW Realisation 1 Ltd, Ethel Austin Ltd (commonly referred to as the “Woolworths” case). The ECJ has determined that, for the purposes of collective redundancies, an “establishment” is the local unit to which the redundant workers were assigned.

The case concerns 4,500 former employees of Woolworths and Ethel Austin who were denied the right to claim a protective award in respect of their employer’s failure to engage in collective consultation because they worked at stores with fewer than 20 employees. The question to be determined was whether the consultation obligations applying to collective redundancies are triggered when the number of employees proposed to be made redundant at an establishment is less than 20. This turned on the correct meaning of “establishment”.

The ECJ was asked to clarify the meaning of “establishment” and explain whether the term applies to an entire business or to a particular store. The ECJ decided that an “establishment” is the local unit to which the redundant workers are assigned to carry out their duties. The threshold of 20 or more dismissals continues to be the trigger determining whether the business must engage in collective consultation. However, there is no need to aggregate all the dismissals in a particular organisation to determine whether the threshold has been met.

The case now returns to the Court of Appeal which will decide whether each branch of Woolworths or Ethel Austin was an establishment. However, the ECJ’s decision means it is likely that the former employees of Woolworths and Ethel Austin will miss out on receiving protective awards.