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Breaking News: Judgment In The Woolworths Collective Redundancy Consultation Case

Breaking News: Judgment In The Woolworths Collective Redundancy Consultation Case

In February we sent out an article reporting on the opinion of the Advocate General of the Court of Justice of the European Union (CJEU) in the important and widely publicised case involving Woolworths.

A link to the press release issued by the CJEU is here and the judgment itself is here.

The case was brought on behalf of employees who were made redundant as a result of the insolvency of Woolworths (and Ethel Austin). They sought “protective awards” as a result of the failure of  Woolworths and Ethel Austin to engage in adequate collective redundancy consultation in advance of their dismissals.

In the UK, the obligation to collectively consult with representatives of affected employees is engaged when an employer proposes to make 20 or more redundancy dismissals at one establishment in a 90 day period.  The traditional approach in the UK had been to assess the number of redundancies on an individual establishment basis. In the Woolworths case, the Employment Appeal Tribunal decided that the UK’s approach was incompatible with European law and that the words “at one establishment” should therefore be deleted from UK law in order to comply with European law. The result of this would have been that the number of proposed redundancy dismissals in all of an employer’s establishments would have to be aggregated, in order to determine whether the threshold for collective redundancy consultation would be met. This would inevitably lead to the obligation to collectively consult being engaged far more frequently, at greater cost and disruption to business. An appeal was made to the Court of Appeal on behalf of the liquidators of Woolworths and the Court of Appeal referred the question to the CJEU.

The CJEU has today issued its judgment. The CJEU’s verdict, which fully supports the opinion of the Advocate General, is that the UK’s decision to set a threshold based on the number of redundancies “at one establishment” is not at odds with European law.  This means that employers can, therefore, continue to assess the number of proposed redundancies on an individual establishment basis. The CJEU has previously stated that “establishment” should be interpreted to mean “the unit to which the workers made redundant are assigned to carry out their duties” and it is for national courts and tribunals to determine on a case by case basis what the appropriate establishment is.

This is great news for employers although there will still inevitably be disputes in the UK on the issue of how to determine the appropriate “establishment” in any given case.

Andrew Knight
Solicitor

LChalmers