Collective redundancies: Watch out for Woolworths

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Posted in:Corporate and Commercial, HR and Employment|February 13, 2015 | Join the mailing list

An important case before the EU Court of Justice, whose outcome will have a major impact on the UK laws regarding redundancy, has moved a step closer to judgment.

Before cases such as this are decided by the EU Court, an official known as the Advocate General provides his or her opinion on what that judgment should be and often (but not always) that opinion is then followed by the Court when making its final ruling.

Advocate General Wahl has now provided his opinion to the EU Court on the meaning of the word “establishment” in the EU Collective Redundancies Directive and it will be the EU Court’s decision on this point which will have an important impact on UK redundancy

The case was brought by the trade union, USDAW, on behalf of individuals who were made redundant when the companies, Woolworths and Ethel Austin, collapsed.  Known as “the Woolworths case”, it has already been widely reported and much discussed (including by
Berg –
click here for more information).

Put simply, the question being decided is whether individuals who were made redundant from Woolworths where there were fewer than 20 redundancies taking place at the individual store at which those people worked, are entitled to an employment tribunal award,
known as a protective award, because their employer failed to consult with employee representatives before the employees were made redundant.  Of fundamental importance to answering this question is the correct meaning of the word “establishment” within the
relevant legislation and whether it means the individual store where the employee worked, or means all of the stores which were owned by the employer put together.  

When the case reached the UK Court of Appeal, that Court felt it had to refer this question, which involves interpretation of the EU Collective Redundancies Directive, to the Court of Justice of the European Union and the EU Court is considering the case with
a number of other cases posing a similar question.  

In summary, the Advocate General’s opinion states that “establishment” in the EU Directive means the site where workers “are assigned to carry out their duties”. He goes on to say that it would be up to national courts to decide how the “local employment unit”
is identified in each case and that “the Directive does not require (nor does it preclude) aggregating the number of dismissals”.  The full opinion can be found here. If this opinion is followed by the EU Court, it is likely to mean that the UK Court of Appeal
will in turn rule that “establishment” in UK law means the individual site at which the employee worked rather than meaning all of the employer’s sites put together. This would then mean that collective redundancy consultation with trade unions or other employee
representatives would only be needed where there are 20 or more redundancies taking place at an individual site, rather than across the employer’s business as a whole.       

The EU Court’s decision is expected shortly and the decision from the Court of Appeal is then expected to be out by the end of the year, so watch this space for the next instalment in this ongoing saga.

For more information about any of the above or for practical commercial advice on this or any other aspect of employment law, please contact
Kim Freeman-Smith of the Berg Employment Team on 0161 833 9211 or email her at

Follow us on Twitter: @Berg_HR

(The information and opinions contained in this News Alert are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Berg or any of its partners or employees. Professional legal advice
should be obtained before taking, or refraining from taking, any action as a result of this article.)

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