When does “at one establishment” mean at any number of establishments? When you are interpreting the collective redundancy provisions of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), at least according to the Employment Appeal Tribunal (EAT) in USDAW v Woolworths (2013)!
When Woolworths collapsed back in 2008, it employed about 25,000 staff across its 815 stores. All the staff were made redundant. Under the provisions of TULRCA, when an employer is contemplating making 20 or more people redundant at one establishment within a 90 day period, it is obliged to enter into collective consultation with the trade unions or the employees’ elected representatives. Woolworths’ administrators treated each store as a separate establishment and entered into collective consultation with those employees employed in stores with 20 or more staff. It did not enter into collective consultation with the staff employed in the smaller stores. The 3,233 staff from the smaller stores argued that the requirement that there needed to be 20 or more employees “at one establishment” was inconsistent with the provisions of the European Collective Redundancy Directive. The EAT agreed, and decided that TULRCA should be construed with the words “at one establishment” deleted.
This is an important decision, and one which has significantly changed the landscape for the requirements for collective redundancy consultation. There had previously been argument about what was meant by “at one establishment”, i.e. whether there was a geographic or management control test, but now that argument has been swept away, and if an employer is contemplating making 20 or more people redundant within a 90 day period, it should enter into collective consultation. It should also be noted that the Department for Business, Innovation and Skills have recently announced their intention to appeal against this decision.
This is a complicated area, and employers should seek specialist advice at an early stage so as to avoid potentially very expensive mistakes.
Please also note that the period of collective consultation required is dependent on the numbers of contemplated redundancies, and the periods required were changed in April this year – our article on this change can be found here.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).