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Collective Redundancies Consultation – Secretary of State Granted Leave to Appeal Against No Establishment Limitation

Under Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), employers have a duty to consult with appropriate representatives of employees concerning forthcoming redundancies if 20 or more employees are to be dismissed ‘at one establishment’ within a 90 day period.

In May this year, the Employment Appeal Tribunal (EAT) ruled (USDAW and Another v Unite the Union and Others) that the words ‘at one establishment’ should be deleted from the Act in order to give effect to EU Council Directive 98/59EC, which it is intended to implement.

The effect of this decision was to eliminate the site-based restriction, meaning that former employees of Woolworths and Ethel Austin Ltd. who had worked at branches with fewer than 20 members of staff who had not been consulted about the proposed redundancies were entitled to be paid a protective award.

The decision would make a significant change to the collective consultation obligations of employers when 20 or more employees are to be dismissed as redundant from a business as a whole, irrespective of their place of work.

Although the Secretary of State had declined to attend the earlier hearings, the EAT accepted his apology for failing to participate and agreed that the issues raised by the appeal are of wide importance. Permission to appeal was therefore granted on condition that the Secretary of State indemnifies the claimants for their reasonable costs in the Court of Appeal.