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Redundancy: Meaning of 'Establishment'

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 Thanks to Ed McFarlane of Deminos HR for preparing this case summary

Does the EU Collective Redundancies Directive 98/59 require that the numbers of employees dismissed across an employer’s various establishments be aggregated to see if the thresholds for protection under the Directive are met?

No, says Advocate General Wahl in Usdaw & Wilson v Woolworths and others, giving the preliminary opinion on the reference to the ECJ from the Court of Appeal in the Woolworths case (summarised here), which was heard along with the Northern Irish industrial tribunal case of Lyttle v Bluebird and a Spanish case, Cañas v Nexea. The judgment looked at the alternative methods for implementing collective redundancies under Article 1 (a) (i) or (ii).

The Court of Appeal referred two questions from the ‘Woolworths’ case, the first whether the phrase in the Directive ‘at least 20’ dismissals referred to dismissals over the employer’s establishments, or the number in each establishment, and if it did refer to each establishment, what was meant by ‘establishment’?

The Advocate General noted (para. 61) ‘…that directive does not require — nor does it preclude — aggregating the number of dismissals in all the employer’s establishments for the purposes of verifying whether the thresholds set in Article 1(1)(a) are met...”and noted that ‘…It is for the Member States to decide, where appropriate, to increase the level of protection… …provided that, on every occasion … it would be more favourable to the workers made redundant…’.

The Advocate General recommended answering that the meaning of ‘establishment’ in the Directive was the same under Article 1 (1) (a) (i) and (ii) and ‘…that concept denotes the unit to which the workers made redundant are assigned to carry out their duties, which it is for the national court to determine…’.

The Advocate General recommended not answering the Court of Appeal’s second question regarding redundant employees of insolvent companies being able to claim against the UK government for not implementing the Directive properly, without suggesting that was the case.

This opinion is not binding on the full ECJ, which should rule on the questions later in the year.