Last year Woolworths went into administration, followed by liquidation. No buyer was found for the business, all 814 stores closed and 27,000 retail employees were made redundant. Collective consultation obligations were triggered and the tribunal ordered a protective award because those obligations had not been met in full. But the tribunal decided that only employees at stores with 20 or more employees could benefit from the protective awards made. The tribunal held that each store was an establishment, rather than the retail operation as a whole. Since the legislation requires the dismissals to be "at one establishment", this meant that there was no duty to consult in respect of redundancies at the stores with fewer than 20 employees and those employees could not benefit from a protective award.
The rationale behind the tribunal's decision was that each of the stores was a physically distinct premises with its own organisation, headed by its own store manager. Employees were not peripatetic; they worked only at one particular store.
Although the tribunal's decision reflected the approach that has been taken in recent years in the UK, it has been successfully appealed, along with a similar decision relating to Ethel Austin, another chain of stores. The EAT held that UK legislation is inconsistent with the European Directive which it was intended to implement – in the latter the duty to consult (according to the EAT) applies even where the dismissals are at different establishments. In a drastic solution to the discrepancy, the EAT has decided that the words "at one establishment" must in effect be deleted, with the result that the collective redundancy obligations apply whenever an employer contemplates redundancy dismissals for 20+ employees within 90 days, irrespective of the number of establishments concerned.
This is a significant change to the law and, pending an appeal or a legislative change, employers must now assess their collective consultation duties on the basis of counting all employees being made redundant, regardless of their place of work.