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The Woolworths case and the Advocate General’s opinion

Print publication

27/03/2015

We now have the Advocate General’s Opinion in the ‘Woolworths case’ in respect of the definition of an ‘establishment’ for the purpose of determining when the duty to consult appropriate representatives under the European Collective Redundancies Directive (the Directive) arises.

The Opinion confirms that the Directive does not require employers to aggregate the number of dismissals in each of the employer’s establishments for the purpose of considering whether collective consultation should take place.

The Advocate General’s Opinion is good news for employers although, frustratingly, it is only an opinion and is therefore not binding on the European Court of Justice (ECJ) which has yet to hear the case, nor does it change the current legal position in the UK as set down by the Employment Appeal Tribunal. That said, the ECJ usually follows the Advocate General’s Opinion meaning that we are likely to see a return to the original ‘status quo’ or ‘pre-Woolworths’ position following the ECJ’s decision in the case which is expected later this year.

Background
The Employment Appeal Tribunal (EAT) had found, in 2013, that the UK Government had failed to implement the Directive properly and that the words ‘at one establishment’ must be deleted from s.188(1) of TULR(C)A in order to bring it in line with the Directive.

This decision had an enormous impact on many UK employers, especially those who operate a number of sites. The decision effectively forced employers to aggregate proposed redundancies across all UK sites for the purposes of determining whether the ‘collective redundancy’ threshold of 20 (or 100) proposed redundancies would be met in any 90-day period.

In his Opinion, the Advocate General addressed the point that, if the ‘one establishment’ wording remained, then many workers dismissed over the course of an overall redundancy exercise would not be entitled to the protection that the collective redundancy rules provide. He stated that whilst this was so, it was not contrary to the Directive because the aim of the Directive was not to provide full protection for all employees but to provide a minimum level of protection in a collective redundancy situation.

Practical implications
Despite the hope that the Advocate General’s opinion offers to employers, it does not change the current legal position set down by the EAT. Therefore, as the law currently stands, the correct approach is to collectively consult with employee representatives as soon as more than 20 redundancies are proposed by one employer regardless of the employees’ locations. This presents a potential logistical and practical challenge as the threshold of 20 may be reached very quickly where a handful of redundancies are being made at different sites.

Employers are currently in something of a ‘limbo’ period and we suggest the following practical steps are followed pending the ECJ’s final determination on the point:

  • Multi-site employers should aim to use a centralised system to ensure that a ‘red flag’ is raised when there are in excess of 20 proposed redundancies within a 90 day period across the business locations.
    Continue to adopt the approach that unrelated and disparate redundancy exercises will probably need to be aggregated when calculating whether the collective consultation threshold has been met.
  • Be aware that the definition of ‘redundancy’ for collective consultation purposes includes dismissals related to changes to terms and conditions so is not limited to the closure of a site, the reduction of work or number of employees required to carry out the work.
  • Awareness training should be considered for HR teams to minimise the risk of a slip up. This can emphasise the point that whilst the AG’s Opinion provides hope for employers, the law has not yet returned to the ‘pre-Woolworths’ position.
  • Employers should audit any ongoing or proposed redundancy exercises to ensure compliance.
  • Those employers who were finding themselves under pressure from Trade Unions to agree amended collective consultation procedures in light of the EAT’s decision will now be able to refer to the Advocate General’s Opinion. Arguably, it provides valid justification for waiting for the ECJ’s decision later this year before making any permanent changes to industrial practices.

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