The EAT decided in 2013, in a case involving numerous redundancies from various Woolworths stores, that an employer had to count all proposed dismissals across all establishments in assessing whether or not the collective redundancy consultation requirements applied. These rules are contained in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
This decision was a departure from previous case law. It also involved the EAT effectively "deleting" the words "at one establishment" from TULRCA. It had previously been thought that the collective redundancy requirements of TULRCA were only triggered if an employer proposed to dismiss 20 or more employees at a single establishment. The approach of the EAT in the Woolworth's case changed this so that employers had to aggregate all proposed redundancies across all sites when assessing if 20 or more dismissals were proposed. The practical effect was that employers have been having to collectively consult far more than previously, and the exposure for protective awards has increased. The EAT said that this approach was to ensure that UK law was interpreted in a way that is compatible with the European Directive on collective redundancies.
The case was appealed to the Court of Appeal which then referred certain questions to the European Court of Justice on 22 January 2014. Last week the Advocate General issued his opinion in the Woolworths case. This option is given in advance of the ECJ's judgement and although it is not binding, it is often followed by the court.
Meaning of Establishment
The Advocate General's Opinion was good news for employers. It said that TULRCA which referred to a need to count only those proposed dismissals at "at one establishment" was legitimate. The Opinion said that "establishment" means the local employment unit to which the redundant worker is assigned to carry out his duties. Dismissals across different establishments do not need to be aggregated.
If the ECJ takes the same view, this decision will be a significant relief for larger multi-site employers which have had to aggregate the number of proposed dismissals across various sites since the Woolworths decision in order to avoid exposure to protective awards.
The ECJ ruling is expected later on this year. The case will then be decided by the Court of Appeal in light of this ruling. This decision is definitely one to watch out for!