Collective redundancy consultation: European Court to hear "Woolworths case" in November - DAC Beachcroft

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Collective redundancy consultation: European Court to hear "Woolworths case" in November

Published On: 22 October 2014

The Court of Justice of the European Union (CJEU) have announced that they will hear the USDAW v Ethel Austin Ltd (in administration); USDAW and anor etc - the "Woolworths" case on Thursday 20 November 2014. It will be in a combined hearing with the similar cases of Lyttlefrom Northern Ireland and Rabal from Spain.

This is the case which sent shockwaves through the legal and HR professions, in the summer of 2013, when the Employment Appeal Tribunal (EAT) decided that the words "at one establishment" are to be disregarded for the purposes of any collective redundancy involving 20 or more employees. Meaning that employers were required to consult with appropriate representatives in many more situations than they did before this decision.

The issue in the Woolworths case was when the duty to collectively consult was triggered. The employer said that it is triggered when 20 employees are at risk of redundancy in any single establishment operated by it. The employees said that the 20 employee trigger relates to the total number of at-risk employees in all the employer's establishments. The EAT agreed with the employees that the correct test was whether the 20 employee total was triggered by the cumulative total of all the establishments. Click here to see our alert from June 2013 for more detail.

This case was appealed to the Court of Appeal who heard it in January 2014. However, before making a decision, the Court decided to refer a point to the CJEU on the interpretation of the European Directive which governs this area. This has meant that the law relating to collective consultation has remained in a state of flux. Unfortunately this is likely to continue for some time as the CJEU will want to carefully consider the arguments and often take months to produce their decision.

The EAT decision stands unless and until it is overturned by the Court of Appeal. Failure to comply with the test laid down by the EAT may mean that employers start to consult too late or not at all, risking substantial protective awards. The decision is also relevant to the length of consultation where employers are proposing to make 100 or more redundancies within a 90 day period, as this is also currently determined with reference to a single establishment. Claims for a protective award, brought in reliance on the EAT decision, may be stayed, pending the outcome of the case in the CJEU and Court of Appeal.

Since the EAT judgment came out in June 2013 we have been assisting employers to assess their risk and advising on the possible approaches to manage that risk. Click here to see our alert from January 2014 for some practical tips to consider.

As soon as the CJEU decision is available we will update you.