Woolworths brings good news for employers

A long-awaited Advocate General’s Opinion in a legal case over collective redundancies at Woolworths should please employers.

Employers must collectively consult where it intends to make 20 or more employees redundant at a single establishment, under the Trade Union And Labour Relations (Consolidation) Act 1992 (TULRCA). However, retail chains with fewer than 20 employees at each store, such as the former national store Woolworths, were not treated as a “single establishment”. 

The Employment Appeal Tribunal held that the whole business should be looked at not just the individual locations where employees worked. The Court of Appeal referred the case, USDAW v Ethel Austin Ltd (in administration), to the European Court of Justice (ECJ) for clarity on the meaning of “single establishment”.

Sarah Rushton, employment partner with Moon Beever, says: “Employers have been given a glimmer of hope.  

“The Advocate General has stated that an ‘establishment’, for the purposes of working out if collective consultation requirements are triggered, is the employment unit to which the redundant employees were assigned to carry out their duties, and that this is for the national courts to decide based on the facts (Case C 182/13).  

“This looks like at first blush as if the pre-Woolworths position may prevail. Unfortunately matters are not entirely clear cut as the Advocate General also observed that it is conceivable that several shops operated by one employer within one shopping centre may nevertheless be regarded as one employment unit and that it is not necessary for an employment unit to have financial or administrative autonomy in order for it to be regarded as such. For the time being, employers should therefore err on the side of caution.”

An Advocate General’s Opinion is non-binding but is usually followed by the Court. 

Kevin Charles, director at Crossland Employment Solicitors, says the Opinion is “a positive outcome for large employers”

Jessica Corsi, partner at Doyle Clayton Solicitors, says: “What constitutes an establishment in any given case is still up for grabs.

“The big question now will be how widely an establishment can be defined, with employers arguing for a narrow definition and employees for a wide one. The key in each case is to identify the unit to which the workers are assigned to carry out their duties—but this is a fact-sensitive issue which is open to interpretation.”