Collective Redundancy Consultation – location location!

Employers who are proposing to make redundancies affecting 20 or more employees in one establishment are required to followthe collective redundancy consultation procedure which, depending on the number of employees the employer proposes to dismiss, will take the form of a consultation period lasting a minimum of either 30 or 45 days.

 
One of the difficulties facing an employer proposing to make redundancies has often been the question of what amounts to an ‘establishment’ for the purposes of the collective redundancy consultation requirements. An employer who is proposing to dismiss several employees in a number of different locations would naturally prefer for each location to amount to an establishment in its own right as this could mean the difference between having to follow the individual or the collective redundancy consultation procedure.

 
I the case of USDAW and others –v- WW Realisation 1 Limited (in Liquidation) and another ET 3201156/2010 (the Woolworths case) the Employment Tribunal (ET) held that each Woolworths store amounted to a separate establishment and accordingly it was the number of employees in each store that determined whether the collective redundancy consultation procedure applied to the redundancies at that particular store. In other words, this meant that the collective redundancy consultation procedure did not apply to those Woolworths stores where less than 20 employees were proposed for redundancy. This was no doubt a judgment that was welcomed by many employers as it made it easier for companies proposing redundancies at multiple locations to avoid being caught by the collective redundancy consultation procedure.

 
However, the Employment Appeal Tribunal (EAT) is now reported to have overturned (on 30 May 2013) the ET decision in the Woolworths case. The EAT is reported to have held that the reference in section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 to ‘one establishment’ should be disregarded altogether going forward on the grounds that it is incompatible with the European Collective Redundancies Directive. The EAT held that once an employer proposes that 20 or more employees in a single business are to be made redundant, their location is irrelevant.

 
No written judgment is yet available but if the EAT’s decision is as reported in the press then this means that employers who are proposing redundancies in multiple locations will now have to take into account the total number of proposed redundancies across the various locations when assessing whether or not it needs to follow the collective redundancy consultation procedure. Subject to any further appeal, this case would bring about a significant change to the current law on collective redundancy consultation and it will no doubt result in many redundancy exercises across multiple locations being more costly and time consuming for employers.

 

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© , June 2013

Please contact:

Sara Kennedy - Associate Solicitor

DD +44 (0)20 7553 9937

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