The European Court of Justice (ECJ) has today provided its decision in the long-running Woolworths and Ethel Austin cases (USDAW and anor –v- VW Realisation 1 Ltd and ors). For background on this case please to refer to our previous article.
As a consequence of Woolworths and Ethel Austin going into administration dozens of their stores were closed resulting in many redundancies. This led to the trade union, USDAW, seeking protective awards on behalf of its members relying on the companies’ failure to inform and consult under s188 of the Trade Union Labour Relations (Consolidation) Act 1992 (TULCRA) which is the UK’s adoption of the EU Collective Redundancies Directive (No98/59) .
In doing USDAW argued that when calculating the number of employees that are to be dismissed at one ‘establishment’ for the purposes of TULCRA, the number of such employees should be aggregated across an employer’s various establishments. This would mean that each shop should have been treated as a separate establishment.
Because this legislation is based on the Directive this case proceeded to the ECJ which was asked to decide whether the term ‘establishment’ for collective redundancy purposes refers to an individual workplace or the employer as a whole. The ECJ has today confirmed that ‘establishment’ for this purpose means the entity to which the employee is assigned to carry out their duties and not to the employer as a whole.
There is therefore no requirement on an employer to aggregate dismissals across all of its workplaces when calculating the number of proposed redundancies for the purposes of TULCRA. This decision also confirms that TULCRA itself is not incompatible with the Directive.
This decision does avoid some very significant complications as to collective consultation especially for large organisations.