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Collective Redundancy Consultation – Advocate General’s Opinion on the Meaning of ‘Establishment’

In May 2013, in a decision involving the protective awards payable to employees made redundant by Woolworths and Ethel Austin, the Employment Appeal Tribunal (EAT) ruled that the words ‘at one establishment’ in Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 should be deleted in order to give effect to EU Council Directive 98/59EC, which it is intended to implement. As a result, protective awards were payable to former employees who had worked at stores with fewer than 20 members of staff (USDAW and Another v Unite the Union and Others).

The effect of the EAT’s ruling would be that the duty to consult would be triggered when 20 or more employees were to be dismissed as redundant within a 90-day period from a business as a whole, irrespective of the number of people employed in each individual workplace.

The employers appealed to the Court of Appeal, which sought the opinion of the Court of Justice of the European Union (CJEU).

In the opinion of Advocate General Wahl, the Directive does not require – nor does it preclude – aggregating the number of dismissals in all the employer’s establishments for the purposes of verifying whether the threshold has been met.

In his view, the term ‘establishment’ denotes the unit to which the workers made redundant are assigned to carry out their duties, which it is for the national court to determine.

It is up to member states whether or not to increase the level of protection afforded to workers being made redundant, provided that this would be more favourable on each occasion that the level required by the Directive. It is for the national courts to verify that this is the case.

The Advocate General’s opinion is not binding on the CJEU but it is followed in approximately 80 per cent of cases. The CJEU’s decision is due later this year.

We will keep you informed of developments in this important case.