Woolworths case referred to ECJ

Posted: 5th February 2014

RCJUnder Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, employers have a duty to consult with appropriate representatives of employees concerning forthcoming redundancies if 20 or more employees are to be dismissed at one establishment within a 90-day period.

In May this year, in a decision involving the protective awards payable to employees made redundant by Woolworths and Ethel Austin, the Employment Appeal Tribunal (EAT) ruled that the words ‘at one establishment’ should be deleted from the Act, in order to give effect to EU Council Directive 98/59EC, which it is intended to implement, and protective awards were payable to former employees who had worked at stores with fewer than 20 members of staff (USDAW and Another v Unite the Union and Others).

The effect of the ruling would be that the duty to consult would be triggered when 20 or more employees were to be dismissed as redundant from a business as a whole, irrespective of the number of people employed in each individual workplace.

Until the EAT’s decision, the Secretary of State for Business had declined to become involved in the proceedings as he had ‘nothing to usefully contribute about the consultation process between the parties’. Following the ruling, however, he applied for permission to appeal the decision.

Permission was granted as there were compelling reasons for allowing an appeal, including a parallel reference to the European Court of Justice (ECJ) from the Northern Ireland Industrial Tribunal, the importance of the ruling in terms of its effect on business as a whole and the value of the claims.

The Court of Appeal has now decided to make its own referral to the ECJ as to the correct interpretation of the Directive with regard to this matter.