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. Under UK law, however, the duty to consult was triggered only where there were more than 20 employees at a single establishment. This meant that stores with less than 20 staff were not counted.
The Employment Appeal Tribunal (EAT) last week held this to be an unnecessary restriction of their rights, and to not be historically or legally justified, in two combined appeals: Usdaw, Wilson & Ors v WW Realisation 1 Ltd (in liquidation); and Usdaw v Ethel Austin Ltd (in liquidation). A written judgment has not yet been released.
When Woolworths became insolvent in 2008 and failed to consult before making 27,000 staff redundant, more than 3,000 former employees lost out on compensation, the EAT ruled.
It ordered that the words “at one establishment” be disregarded for the purposes of any collective redundancy involving more than 20 employees, in s 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992.
This 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 Usdaw. The Marleasing rules allow the courts to rewrite domestic law to make it comply with EU requirements.
Cain says: “This decision re-defines the scope of the duty, and means companies will need to consult regardless of whether their staff work on one large site or several small ones, if more than 20 are affected.”
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