In 2013 the EAT decided in a case involving numerous redundancies from various Woolworths stores, that an employer had to count all proposed dismissals across all local units or "establishments" in assessing whether or not the collective redundancy consultation requirements applied. This decision came as a surprise to many employers, since it was a departure from previous case law and significantly increased time and costs for employers involved in redundancy processes.
Woolworths subsequently appealed the decision to the Court of Appeal, which then referred certain questions to the European Court of Justice in January 2014. In February of this year, the Advocate General issued his opinion in the case.
Last week, the European Court of Justice (CJEU) handed down its judgement. The decision confirmed the approach taken by the Advocate General; that the term 'establishment', in the collective redundancy legislation, refers to an individual workplace and not to the employer as a whole. This is effectively a return to the previous legal position which was much more manageable for businesses. It provided that separate premises will be treated as separate establishments when determining whether 20 or more redundancy dismissals are proposed in a 90 day period; and therefore give rise to an obligation for employers to collectively consult with employees' representatives. The decision will be welcomed by multi-site employers across the UK; particularly in the retail, hospitality and transport sectors.
The case has now been referred back to the Court of Appeal to deliver its decision. Given the ECJ's decision, it is highly likely that it will reverse the EAT decision.
Although the Court's judgement is not yet available, the official summary can be viewed here.
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