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Collective Redundancy Consultation: The Woolworths Case

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We've all heard about it, and the transcript is now available.  The full title of the case is quite long, but everyone knows it as the USDAW v Woolworths case.

The Employment Appeal Tribunal holds that there should be a purposive construction of section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, so as to delete the words "at one establishment" (paragraph 53).

When Woolworths (and Ethel Austin) became insolvent, there was collective consultation.  Each store was treated as "one establishment", as has been accepted practice in the UK for many years. As a result, there was only collective consultation at the bigger stores, ie those with more than 20 employees. 

HHJ McMullen, in the EAT, has held that that does not reflect what the relevant EU Directive requires (which does not refer to single establishments, at least not in this context).  There is no ability for an employer to 'opt-out' of collective consultation under the DIrective by scattering their employees throughout different establishments around the UK, and the employers should have consulted with all employees, not just those at the larger stores.  TULRCA 1992 is more restrictive that the Directive and, insofar as it fetters rights granted by the Directive, it should be interpreted purposively so as to disapply that restriction.  That purposive construction can be achieved by deleting the words "at one establishment", so that s188 imposes collective redundancy requirements whenever an employer contemplates dismissing 20+ employees within 90 days on grounds of redundancy, irrespective of the number of 'establishments'.

The result of the case is that all the employees from the smaller stores (1,210 employees at Ethel Austin, and 3,233 at Woolworths) became entitled to a protective award.  This decision has huge ramifications.  The Secretary of State did not participate in the EAT hearing; it is unknown as yet whether there will be any attempt to take the case to the Court of Appeal.

Wragge & Co have some suggestions about the ramifications of the decision.  And, of course, I'll cover the implications in my MasterClasses later this month (see below).  If you haven't yet booked, please do - one of the London dates is fully booked and several others are reaching capacity.