The requirement that proposed redundancies of 20 or more within
a 90 day period must occur "at one establishment" has
received lots of attention in the recent month. In the first
noteworthy case, the Employment Appeal Tribunal
("EAT") made a bold decision in deleting
such wording from section 188 of the Trade Union Labour Relations
(Consolidation) Act 1992
("TULR(C)A").
The liquidation of Woolworths and Ethel Austin has made the
headlines once again - this time, not because of the loss of
thousands of jobs, nor the marked absence of those well know
retailers from the high street, but because the EAT has issued a
decision which has significantly changed the landscape in which HR
practitioners and employment lawyers have been working in when
considering if collective consultation obligations arise.
Section 188 of TULR(C)A has stated, for a number of years, that an
employer's duty to consult arises when it proposes to dismiss
as redundant 20 or more employees at one establishment within a 90
day period.
The administrators appointed to administer the assets of
Woolworths and Ethel Austin treated each individual store as one
establishment. This was not an unusual position to take. The
recognised trade unions brought claims on behalf of 1,210 employees
from Ethel Austin and 3,233 employees from Woolworths alleging that
section 188 of TULR(C)A was contrary to the EU Collective
Redundancies Directive No.98/59 from which it derived (the
"Directive").
The Directive provided that the obligation to collectively consult
arose when the number of redundancies was "at least 20,
whatever the number of workers normally employed in the
establishments in question". Considering this against section
188 TULR(C)A, the EAT did not believe there was a need to limit the
establishment to one establishment or to impose a site based
restriction, as the wording of the Directive was that the duty
applied, "whatever establishment the employees worked
in".
Section 188 of TULR(C)A was therefore more restrictive than the
Directive and limited its core objective of improving employee
rights. To resolve the issue, the EAT believed that compliance with
the Directive could be achieved by deleting the words "at one
establishment" from the TULR(C)A.
This decision has reshaped the landscape, and has increased the
scope of the collective redundancy obligations in TULR(C)A. HR
practitioners and labor and employment lawyers will have to ensure
a full understanding of the number of proposed redundancies in a
business with multiple sites. Open and co-ordinated communication
will be key to ensuring one employee at a particular store does not
tip the number of potential redundancies to 20 and therefore
trigger the obligations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.