European Court of Justice gives collective redundancy decision in Woolworths case

Law and Labour — Tue, 05 May 2015 10:19:59 +0000

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”.

In the UK, the Collective Redundancies Directive is implemented through the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). Section 188(1) TULRCA stipulates that the obligation to consult collectively is triggered where an employer is proposing to make redundant 20 or more employees at one establishment within a 90-day period.

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.

CASE USDAW & another v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd & another (Case C 80/14), 30 April 2015

Former Woolworths staff may miss out on compensation

Law and Labour — Sat, 07 Feb 2015 10:14:00 +0000

The next step in the long-running Woolworths case has taken place, with the Advocate General of the European Court of Justice (ECJ) delivering his opinion. The Advocate General is of the view that it is up to national courts to determine what constitutes the “local employment unit” for the sake of triggering collective consultation. There is no requirement to aggregate the number of dismissals across different employment sites to determine whether the threshold of 20 employees has been met. The opinion favours the Government’s position and means that former employees of Woolworths and Ethel Austin may lose their claims for compensation over the businesses’ failure to consult on their redundancies.

Three cases on collective redundancy were referred to the ECJ to be heard together. Each case concerned how to decide whether or not an employer’s obligation to engage in collective consultation is triggered under the Collective Redundancies Directive.

The UK case is USDAW v Ethel Austin Ltd (commonly referred to as the “Woolworths” case) in which the question to be determined was whether the collective consultation obligations are triggered when the number of employees proposed to be made redundant at an “establishment” is less than 20. The case affects 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 issue was referred to the ECJ by the Court of Appeal. The Advocate General’s opinion comes after a joint hearing, which took place at the ECJ on 20 November 2014.

The Advocate General noted that each case sought clarification on the correct size of an “establishment”. He made a number of points:

“Establishment” means the unit to which the workers to be made redundant are assigned to carry out their duties. What amounts to a “local employment unit” is for a national court to decide. It could be a single store or a number of stores in the local area. The Directive does not require or preclude the numbers of dismissals at all establishments from being aggregated for the purposes of meeting the collective consultation threshold. Each member state is free to decide which option to choose and it is open to a state to enact rules which are more favourable to workers. The purpose of the Directive is to provide minimum protection to workers in situations where collective redundancies arise. In order to provide such protection, a court could adopt an interpretation where all the dismissals in the context of a single restructuring exercise are bracketed together. However, that interpretation would mean equating “establishment” with “undertaking”, and the use of the these terms elsewhere in EU law has shown [...]

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European Court of Justice gives collective redundancy decision in Woolworths case

Former Woolworths staff may miss out on compensation