Collective redundancy rewritten in Woolworths case
Former staff at Woolworths have won the right to seek compensation in a ground-breaking case on collective redundancy laws.
Under the European Collective Redundancy directive, companies must consult with staff representatives before making large numbers of redundancies. However, UK law included a further limitation to this rule for workers in smaller establishments, which the Employment Appeal Tribunal last week found to unnecessarily restrict their rights, and to not be historically or legally justified.
When Woolworths became insolvent in 2008 and failed to consult before making 27,000 staff redundant, more than 3,000 former employees working in individual shops with less than 20 employees were not awarded the compensation they deserved, the EAT ruled. A written judgment has not yet been released.
The EAT ordered a rewrite for all future purposes of s 188(1) of the Trade Union and Labour Relations (Consolidation) Act of 1992, which contains the rules for collective redundancy, including how to count staff to be consulted and compensated.
The EAT ruled that the words “at one establishment” are to be disregarded for the purposes of any collective redundancy involving more than 20 employees.
It is the most high-profile use of the Marleasing rules ever in the UK, according to Mike Cain, solicitor at Slater & Gordon, who acted for the staff and their trade union Usdaw. The Marleasing rules allow the courts to rewrite domestic law to make it comply with EU requirements.
Cain said: “We have been able to change the law to require companies to consult when making large scale redundancies, regardless of whether their staff work on one large site or several small ones.”
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