The European Court of Justice (ECJ) has this morning released its judgment in the landmark case of USDAW and Wilson (C-80-/14) and connected cases.

The key points are:

  • The ECJ has held that, under EU law, an employer only needs to take into account the number of proposed dismissals at each individual establishment when determining whether the threshold number for collective redundancy consultation has been reached.
  • This means that employers can now feel confident that they can treat individual sites or premises as separate establishments for the purpose of determining whether there is a requirement to collectively consult and what period of collective consultation applies, rather than having to ‘pool’ across different sites and premises.
  • The ECJ held that section 188 of the UK’s Trade Union Labour Relations (Consolidation) Act 1992 was compatible with the EU Collective Redundancies Directive (98/59/EC, the Directive) on this issue.
  • The ECJ confirmed that ‘establishment’, in the context of collective redundancy consultation, means ‘the unit to which the workers made redundant are assigned to carry out their duties’ (in line with its finding in the Rockfon case [1996] IRLR 168).
  • It further confirmed that it is not essential in order for there to be an ‘establishment’ that the unit in question has a management which can independently effect the collective redundancies. What constitutes a ‘unit’ in any particular case will remain for the national court to decide.
  • The ECJ judgment accords with the opinion of the Advocate General in the case which was released on 5 February 2015. For our briefing on the Advocate General’s opinion please click here.
  • An additional question had been asked of the ECJ, namely whether the Directive could have vertical direct effect against the UK Secretary of State. The ECJ stated that it was not necessary to answer this question as this was only relevant if it had held that the UK had incorrectly implemented the Directive, which it had not.

The judgment marks the end of a long running saga for UK employers. It comes as a welcome relief for employers after an extended period of uncertainty as to when it is necessary to conduct collective redundancy consultation. An employer can now feel confident that, when calculating whether it needs to collectively consult with its workforce on proposed redundancies, it only needs to take account of the number of proposed dismissals in each separate establishment. When doing this, it will, as it has done in the past, need to determine what constitutes an ‘establishment’ within its undertaking. This will require careful consideration and, in many cases, legal advice.