When Woolworths closed down and made their employees redundant, they only complied with the collective consultation requirements in stores that had at least 20 employees. This is because they decided that each store was a separate ‘establishment’ as far as the Trade Union and Labour Relations (Consolidation) Act 1992 is concerned. This piece of legislation states that collective consultation only needs to take place if there are 20 or more employees in an establishment.
The union representing many of the employees brought claims in the employment tribunal on their behalf, saying Woolworths was wrong. However, the employment tribunal found in Woolworths’ favour and dismissed the claims. The union appealed.
The EAT has held that that the employment tribunal was incorrect in coming down on the side of Woolworths. Their reading of the legislation does not reflect what the relevant EU Directive requires (which does not refer to single establishments, at least not in the context of this case). Employment Solicitor Paul Burton, says "There is no ability for an employer to 'opt-out' of collective consultation under the Directive by scattering their employees throughout different establishments around the UK, and the employers should have consulted with all employees, not just those at the larger stores." The UK legislation is more restrictive that the Directive and it should be interpreted purposively so as to dis-apply those restrictions. That purposive construction can be achieved by deleting the words "at one establishment", so that the legislation imposes collective redundancy requirements whenever an employer contemplates dismissing 20+ employees within 90 days on grounds of redundancy, irrespective of the number of 'establishments'.
The result of the case is that all the employees from the smaller stores (1,210 employees at Ethel Austin, and 3,233 at Woolworths) became entitled to a protective award of up to 90 days’ pay each. No doubt there will be further appeals to the Court of Appeal and even the Supreme Court, so watch this space.
For a free initial chat, please call 01202 499255 and Paul or Kate will be happy to discuss any questions that you may have.