Woolworths and Ethel Austin Collective Redundancies

The ECJ has now handed down its judgment in the case of USDAW and another v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and another.

In this case former employees of the high street stores Woolworths and Ethel Austin have tensely awaited the ECJ decision on what amounts to an ‘establishment’ under the collective redundancy legislation. The ECJ have found that ‘establishment’ does not refer to the employer’s business as a whole but to the local employment unit where the workers are allocated to carry out their work.

It is now for the Court of Appeal to decide whether each separate branch of the high street stores known as Woolworths and Ethel Austin were individual establishments or not.

In accordance with collective redundancy legislation, if an employer plans to make redundancies of 20 or more employees at one ‘establishment’ in a period of 90 days or less the employer must inform and collectively consult with those employees. Failure to do so may entitle the employees to a protective award.

This decision will make it harder to trigger the need for collective consultation and will bring great disappointment to many former employees at the high street stores who, as a result of the more restrictive interpretation, will not qualify for a protective award.

The decision is however welcomed by many employers as it provides some much needed clarity on the position of collective redundancies and when the consultation process is triggered.

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