EAT changes redundancy law
Labour & European Law Review Weekly Issue 323 13 June 2013
In a recent decision, the Employment Appeal Tribunal overturned an employment tribunal’s finding that each Woolworths’ store amounted to an establishment for the purposes of collective redundancy consultation set out in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).
It held in Usdaw and ors v WW Realisation 1 Ltd (in liquidation) and Ethel Austin Ltd (in administration) that the duty to consult collectively applies where an employer proposes to make 20 or more employees redundant, irrespective of the number of redundancies in the individual workplace.
Section 188 states: "Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected."
This contrasts with the European Collective Redundancies Directive, which the UK legislation is supposed to mirror. It refers to “the establishments in question” which infers the employer’s business as a whole, irrespective of the number of workplaces.
The case was launched by shopworkers' union Usdaw after Woolworths and clothing retailer Ethel Austin went bust in 2008, with the loss of thousands of jobs. Although both chains collectively consulted as required under TULRCA, they did not consult in stores that employed fewer than 20 staff.
Usdaw argued that those employees were also entitled to be collectively consulted and the EAT has now agreed with that approach.
However, this is not the first time that the EAT has dealt with the point, there are now conflicting authorities at EAT level. In particular, in the 2002 case of MSF v Refuge Assurance plc and anor, the EAT appeared to accept an argument that although the provisions in section 188 were less protective than the Collective Redundancies Directive, it could not disapply section 188.
Given these conflicts, Thompsons will provide further analysis and a summary of the case once the EAT has given its reasons in writing.