- “establishment” means the unit to which the employees are assigned to carry out their duties
- employers are not required to aggregate dismissals across multiple establishments.
A quick recap
- In the UK, employers are required to run collective redundancy consultation when proposing to dismiss as redundant 20 or more employees “at one establishment” in a 90-day period. This is designed to implement the requirements of the EU Collective Redundancies Directive.
- Recent cases have challenged the UK’s approach to “establishment”. Employees and their trade unions have argued that to comply with the Directive dismissals across all of the employer’s establishments should be aggregated in calculating whether the threshold for consultation is met. This interpretation, if correct, would significantly increase the burden on UK business. Multiple, small-scale redundancy exercises across an employer’s business during the relevant period would be aggregated and could not be regarded as separate exercises for the purpose of triggering consultation requirements.
Today, the Advocate General has said that he does not agree with this interpretation. His view is that the UK legislation does comply with the Directive on this point. He says that “establishment” means the unit to which the employees are assigned to carry out their duties. Determining that unit will remain a question of fact for the Tribunal. But, crucially, employers are not required to aggregate dismissals across multiple establishments.
There is a caveat: the Advocate General’s opinion does not have the force of law. We now await the European Court of Justice decision for an authoritative interpretation of the Directive. The Court is not bound to follow the Advocate General’s opinion but it usually does. Therefore, the opinion provides a good guide as to the direction of travel on this issue. If the Court does agree with the Advocate General, the UK legislation will not require amendment and UK business can breathe a sigh of relief.