News Updates

Collective consultation

Tuesday 5th May 2015

The ECJ has now issued its decision in USDAW and anor v VW Realisation 1 Ltd and ors. The case was referred by the CA and involved the closure of Woolworths and Ethel Austin stores across the UK. It was alleged that there had been a failure to collectively consult, which in a redundancy context arises when an employer proposes 20 or more redundancies at an establishment, within 90 days.

The ET found that each store was a discrete establishment, so the duty was not triggered at stores where fewer than 20 employees were affected. The EAT took a different view, deciding that the UK had failed to implement the Collective Redundancies Directive properly. Adopting a purposive construction, the EAT held the duty was triggered when an employer contemplates dismissing 20 or more employees, regardless of how many establishments make up the employer’s business. The CA made a reference to the ECJ in January 2014, following an intervention by the Secretary of State.

The AG issued an opinion earlier this year and the ECJ has now confirmed that establishment, for these purposes, means the entity to which a worker is assigned. Therefore, separate establishments do not need to be aggregated to determine if the 20 employee threshold is met. The case will now return to the CA to consider if the ET’s interpretation of each site as an establishment was correct, but this is likely to be the case.

The decision will be welcomed by employers who operate at multiple sites in the UK, but consideration will still need to be given as to whether each site qualifies as an establishment.

All information in this update is intended for general guidance only and is not intended to be comprehensive, or to provide legal advice.