Current legislation requires employers to collectively consult when they propose to dismiss as redundant at least 20 employees at one establishment within a period of 90 days or less.
In February 2015, we reported that the Advocate General in the “Woolworths case” had indicated that it is not necessary to aggregate the dismissals across all of an employer’s establishments for the purposes of determining whether the collective consultation obligation has been triggered.
The Advocate General’s opinion appeared to give some comfort to employers who were contemplating large-scale redundancies across various sites; collective consultation that may have been triggered in the past, may no longer need to be a future consideration.
The Advocate General’s opinion was a precursor to the European Court of Justice’s (“ECJ”) decision.
THE ECJ’S DECISION
The ECJ was subsequently asked to decide whether the expression “at least 20” refers to the number of dismissals across all the employer’s establishments or only the number of dismissals in each individual establishment.
The ECJ found that “at least 20” requires a separate account to be taken of the dismissals effected in each establishment.
IMPLICATIONS FOR BUSINESSES
The ECJ’s decision means that where an employer is made up of several establishments, collective consultation is only required at those establishments where it is proposed to dismiss 20 or more employees. There is no requirement to aggregate the dismissals arising across all the establishments.
Employers should however be aware that when contemplating large-scale dismissals across various sites/business units, consideration still needs to be given as to whether those sites constitute separate establishments.
USDAW v Ethel Austin Ltd (in administration) and another UKEAT/0547/12 (European case reference: USDAW and Wilson v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and BIS C-80/14) (the “Woolworths case”)
If you are faced with a potential large-scale redundancy or business re-organisation and you have concerns about identification of an “establishment” for collective redundancies please contact:
+44 (0) 1604 871143
This update is for general guidance only and does not constitute definitive advice.