Woolies is going to Europe

28th January 2014

Woolies is going to Europe

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Regular readers of our monthly employment law newsletter will know that last July we reported on the Employment Appeal Tribunal’s decision in USDAW v Ethel Austin Ltd (in administration) and another, colloquially known as the “Woolworths case” because it followed the collapse of that business.

The Employment Appeal Tribunal held that the words “at one establishment” should be removed from the law which states that employers must collectively consult when proposing 20 or more redundancies in a 90-day period. This landmark decision meant that the duty to collectively consult will be triggered where an employer is proposing to dismiss 20 or more employees across the whole of their organisation, and will now arise in circumstances where it previously would not have done.

The Government appealed the decision and the Court of Appeal has now referred to the European Court of Justice (ECJ) the question of what constitutes an “establishment” for collective consultation purposes. Whilst it is hoped that the ECJ will be able to provide much needed clarity on the issue and a definitive verdict, given the time it typically takes for cases to work their way through the system, employers will have to wait a while for this. In the meantime, the safest approach continues to be to consult collectively where 20 or more redundancies are proposed across the whole organisation, and not to look at individual sites or branches in isolation. In practice this means that multi-establishment employers that don’t manage their sites centrally and/or which take decisions about redundancies at local level will need to ensure that establishments communicate with each other and keep appropriate records about proposed redundancies and dismissals.

Practical Tip:

Until such time that we have a definitive verdict, the safest approach is to consult collectively where you propose to dismiss 20 or more employees in a 90-day period looking across the whole of your organisation. For example, if you have put 2 employees at risk of redundancy and anticipate putting a further 18 or more employees at risk within the next 90 days it would be advisable to consult with all of them collectively, even if the employees are located at different sites.
If you need any employment advice one of our employment solicitors in Ipswich can help for a fixed fee.  Call 01473 211121 or contact one of the employment team directly.

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