The requirement that proposed redundancies of 20 or more within a 90 day period must occur "at one establishment" has received lots of attention in the recent month. In the first noteworthy case, the Employment Appeal Tribunal ("EAT") made a bold decision in deleting such wording from section 188 of the Trade Union Labour Relations (Consolidation) Act 1992 ("TULR(C)A").
The liquidation of Woolworths and Ethel Austin has made the headlines once again - this time, not because of the loss of thousands of jobs, nor the marked absence of those well know retailers from the high street, but because the EAT has issued a decision which has significantly changed the landscape in which HR practitioners and employment lawyers have been working in when considering if collective consultation obligations arise.
Section 188 of TULR(C)A has stated, for a number of years, that an employer's duty to consult arises when it proposes to dismiss as redundant 20 or more employees at one establishment within a 90 day period.
The administrators appointed to administer the assets of Woolworths and Ethel Austin treated each individual store as one establishment. This was not an unusual position to take. The recognised trade unions brought claims on behalf of 1,210 employees from Ethel Austin and 3,233 employees from Woolworths alleging that section 188 of TULR(C)A was contrary to the EU Collective Redundancies Directive No.98/59 from which it derived (the "Directive").
The Directive provided that the obligation to collectively consult arose when the number of redundancies was "at least 20, whatever the number of workers normally employed in the establishments in question". Considering this against section 188 TULR(C)A, the EAT did not believe there was a need to limit the establishment to one establishment or to impose a site based restriction, as the wording of the Directive was that the duty applied, "whatever establishment the employees worked in".
Section 188 of TULR(C)A was therefore more restrictive than the Directive and limited its core objective of improving employee rights. To resolve the issue, the EAT believed that compliance with the Directive could be achieved by deleting the words "at one establishment" from the TULR(C)A.
This decision has reshaped the landscape, and has increased the scope of the collective redundancy obligations in TULR(C)A. HR practitioners and labor and employment lawyers will have to ensure a full understanding of the number of proposed redundancies in a business with multiple sites. Open and co-ordinated communication will be key to ensuring one employee at a particular store does not tip the number of potential redundancies to 20 and therefore trigger the obligations.