Following other recent decisions about the meaning of the phrase “at least 20” in the EU Collective Redundancies Directive, the Court of Justice of the European Union (CJEU) confirmed in Lyttle and ors v Bluebird UK Bidco 2 Ltd that it refers to the number of dismissals per establishment and not to the aggregate number across all the establishments of an undertaking.

Basic facts

Bonmarche, a UK chain store selling women’s clothing, became insolvent and was transferred to the Bluebird Company in January 2012. It put in place a business restructuring plan which involved the closure of a number of stores.

The claimants worked in four different stores in Northern Ireland, each of which employed fewer than 20 staff. They were dismissed in March 2012 without any prior consultation, which they argued was contrary to Article 1(1)(a) of the Directive.

The tribunal asked the CJEU to define whether “establishment” has the same meaning in Article 1(1)(a)(ii) of the Directive as it has in Article 1(1)(a)(i); and whether the phrase “at least 20” in Article 1(1)(a)(ii) refers to dismissals across all establishments or to the number per establishment.

Relevant law

The directive requires member states to make provision in national law for employers to inform and consult with employees or appropriate representatives prior to effecting dismissals in “collective redundancy” situations. The directive sets out two formulas for member states to apply in determining when a collective redundancy situation has arisen:

1. Article 1(1)(a)(i) provides that there will be collective redundancies if, within a period of 30 days there are:

  • at least 10 dismissals in establishments normally employing more than 20 and less than 100 workers, or
  • at least 10 per cent of the workers are dismissed in establishments normally employing at least 100 but less than 300 workers, or
  • at least 30 dismissals in establishments normally employing 300 workers or more.

2. Article 1(1)(a)(ii) provides that there will be collective redundancies where the number of redundancies contemplated is at least 20 over a period of 90 days irrespective of the number of workers normally employed in the establishments in question. This is the approach that was implemented in UK legislation as Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

Decision of CJEU

The CJEU confirmed that where an undertaking is made up of several entities, it is the entity to which the workers made redundant are assigned to carry out their duties that constitutes the “establishment” for the purposes of Article 1(1)(a). It was not a requirement of the legislation that dismissals be aggregated across the whole of an employer’s business in order to determine whether the duty to collectively consult was engaged.

In answer to the tribunal’s questions, it held that the meaning of the term “establishment” was the same in both sub sections (i) and (ii). The second subsection was essentially just an alternative to the definition set out in the first subsection, with the exception of the period over which redundancies can be made. The fact that the law offered member states a choice between the two was a good indication that the term could not have a completely different meaning and would be contrary to the need to promote the approximation of laws between member states relating to collective redundancies.

Although it was one of the objectives of the directive to increase the number of workers eligible for protection, the Court noted that the other objective was to ensure comparable protection for workers’ rights in the different member states and to harmonise the costs of those rules for EU undertakings. It would be contrary to those objectives if the collective consultation laws applied to the aggregate number across all the establishments of an undertaking as opposed to the number of dismissals in each establishment.