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For years, in order to circumvent the requirement for compulsory negotiations over redundancies (arising when an establishment is planning to make 20 or more staff redundant) employers have used the term establishment loosely (i.e. treating every business unit as a separate establishment thereby  avoiding the need for lengthy processes).  A view supported by the Court’s of Justice in the EU.

This is no longer the case the Employment Appeal Tribunal (EAT) has in fact rewritten the statute in the case of USDAW v WW Realisation 1 Ltd.  Needless to say the Employment Appeal Tribunal has confirmed that the Secretary of State has applied to appeal the decision

What is at stake?

The EAT has now said that the UK’s legal definition of a collective redundancy situation as one in which there are 20 or more redundancies ‘at any one establishment’ during a period of 90 days is an incorrect transposition of the Collective Redundancies Directive (98/59/EC).  With it’s powers of statutory amendment, the EAT has struck out the words ‘at any one establishment’ from the definition in section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992.

This means that where 20 or more employees are proposed to be dismissed as redundant by any one employer, collective consultation will be required, with no further limitation or consideration of where these employees are located or how the workforce is organised.

Subject to any appeal, this case now represents the law. However, as law firm Wragge & Co‘s points out, “employers should be aware that the issue of what the reference to ‘establishments’ in option B (Article 1(1)(a)(ii)) of the Directive means has been referred to the CJEU by the NI Industrial Tribunals in the case of Lyttle and ors v Bluebird UK Bidco 2 Ltd C-182/13.”

It is worth noting that In North and others v Dumfries and Galloway Council, the Supreme Court considered whether female school workers and male manual workers, who were employed by the same employer at different establishments, were “in the same employment” for equal pay purposes. The issue was whether the women could compare themselves with men employed by the same employer in other places of work, when in practice those men would never be employed to do their current jobs in the same place as the women.  So it seems that the courts are joining the dots!!

Employment team news from Nabarro

There next employment breakfast seminar will take place on 15 October (London) and 16 October (Sheffield). The seminar will revisit the impact of the Woolworths decision, as well as other important developments. To reserve your place please email events@nabarro.com

Citation: (UKEAT/0548/12/N),