Woolworths update: Case to go to Court of Appeal

Woolworths update: Case to go to Court of Appeal


Author: Karen Fletcher

The Employment Appeal Tribunal (EAT) decision in USDAW v Ethel Austin Ltd (in administration); USDAW and anor etc - the Woolworths case - sent shockwaves through the legal and HR professions.

By way of a reminder, in this case the EAT decided that the words 'at one establishment' should be deleted from section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992.

The effect of this decision being that employers must now calculate all their proposed redundancies over a 90-day period nationwide, regardless of the specific location of each redundancy when considering whether collective consultation obligations will apply.

The Secretary of State did not participate in the EAT hearing, and we are told this is because of a failure to appreciate the significance of the Woolworths case.

However, in a unique decision, the EAT has now given the Secretary of State leave to appeal to the Court of Appeal on the definition of 'establishment' for the purposes of collective consultation.

Over to Northern Ireland.

At almost the same time as the Woolworths case, an industrial tribunal in Northern Ireland has referred three questions to the Court of Justice of the European Union (CJEU) - the new name for the European Court of Justice (ECJ) - on precisely the same point in Lyttle & Others v Bluebird UK Bidco 2 Limited t/a Bonmarche.

The facts of this case are similar to the facts in the Woolworths case, where each shop at which each claimant worked employed fewer than 20 employees.

The claimants brought claims of unfair dismissal and sought a protective award for a failure to consult over collective consultation under legislation which mirrors UK legislation.

The questions referred are:

  • In the context of Article 1(1) (a) (ii) of the EC Collective Redundancies Directive 98/59, does 'establishment' have the same meaning as it has in Article 1(1) (a) (i) (i.e. the local work unit to which employees were assigned)?
  • If not, can an establishment amount to an organisational sub-unit of an undertaking which consists of or includes more than one local employment unit?
  • Does the phrase 'at least 20' refer to the number of dismissals across all of the employer's establishments, or to the number of dismissals per establishment?

This reference has been accepted in principle and it is likely that the CJEU's answers to these questions will provide much-needed guidance to the Court of Appeal on the Woolworths case. However, it is unlikely that any judgment will be available before the end of 2014/early 2015.

What about the Woolworths case?

The Court of Appeal is scheduled to hear the Woolworths case on 21 or 22 January 2014, this means that we should have a domestic decision before the CJEU rules on the same issue, although it remains to be seen if the approach of both courts will be the same.

What should employers do in the meantime?

This leaves collective consultation in a state of flux, for some time to come despite this, the EAT decision stands unless and until it is overturned by the Court of Appeal.

Employers are therefore likely to need to change their established procedures when it comes to collective redundancies.

Here are some practical tips for employers consider:

  • ensure that your local HR teams are communicating with each other and that procedures are in place to capture all proposed redundancies across all locations
  • keep a central record of all proposed redundancies nationwide
  • consider whether there are employee representatives currently in place whose responsibilities could be extended to cover collective consultation. This would need to be done in accordance with the internal procedures in place for electing local employee representatives
  • if the employer is proposing to make a few redundancies at many locations nationwide, which collectively amount to over 19 redundancies, consider either appointing one or two employee representatives who can travel around the country or carry out consultation via video phone or other technological solutions
  • the Woolworths decision does not affect the rules relating to the submission of HR1s, and we understand that employers who have tried to submit such forms recently based on redundancies across their organisations rather than at each establishment have had their HR1s rejected. Therefore, employers may decide not to submit an HR1 if they would not have been caught by collective consultation prior to the Woolworths decision.