The Employment Appeal Tribunal transcript of the judgment in the combined cases of USDAW v Ethel Austin Ltd and USDAW v Unite the Union and WW Realisation 1 Limited (often referred to as the Woolworths case) has now been published. This is a significant judgment as it interprets the scope of the duty to consult in collective redundancy situations very widely.
The single issue on appeal in these cases was whether the duty to consult is owed when 20 employees are dismissed or when 20 are dismissed in any one establishment; a site by site atomised approach or a holistic approach. The judgment involves an analysis of parliamentary debate, case law, the wording of the overarching European Directive on collective redundancies (98/59/EC) and the UK implementing legislation (s 188 of the Trade Union Labour Relations (Consolidation) Act 1992).
Article 1 of the Directive gives member states a choice on what triggers collective consultation. The option chosen by the UK was option (ii) which states that the definition of collective redundancies is where the number of redundancies is over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question. The UK implementing law (s 188) states that where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals…. Although there has been significant debate about the meaning of the word “establishment”, in previous decisions tribunals have concluded that consultation is only triggered where 20 employees are made redundant “at one establishment”.
In this bold decision the EAT concluded that the words “at one establishment” should be deleted from s 188 in order to comply with the Directive. The judgment means that provided at least 20 employees are dismissed within a period of 90 days or less collective consultation is necessary. The result being that, in these cases, 4,400 workers are now expected to be seeking protective awards (of 60 or 90 days’ actual pay) for failure to consult.
The outcome of this case means that employers making collective redundancies will now have to consult more widely and will no longer be able to exclude employees who work “at one establishment” where only a few employees are being dismissed. Although the Respondent did not attend the EAT, we wait to see if this decision will be appealed. Given the significant legal and commercial impact for employers of this decision, particularly with regard to insolvency situations, a decision of the Court of Appeal following more balanced submissions by the parties involved would be welcomed.