Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Collective redundancyCase lawRedundancy

ECJ’s clarification of “establishment” in redundancy consultations is good news for employers

by Stephen Simpson 30 Apr 2015
by Stephen Simpson 30 Apr 2015 Thousands of Woolworths and Ethel Austin staff lost their jobs in 2008 and 2010.
Thousands of Woolworths and Ethel Austin staff lost their jobs in 2008 and 2010.

A decision has finally been reached in the long-running Woolworths redundancy case, which focused on whether or not employers should have to consult collectively about redundancies across multiple branches, or “establishments”.

The European Court of Justice (ECJ) today held in Usdaw and another v Ethel Austin Ltd (in administration) and others that, when deciding whether or not collective redundancy consultation obligations are triggered, the number of proposed redundancies should be measured in the entity to which the workers made redundant are assigned to carry out their duties, rather than across the whole organisation.

The decision contradicts the Employment Appeal Tribunal (EAT) decision from July 2013, where it was agreed that the phrase “at one establishment” should be disregarded if total redundancies affected 20 or more people.

Today’s verdict is a kick in the teeth” – John Hannett, Usdaw

The EAT decision effectively meant that UK employers had to initiate collective consultation when they were proposing to make 20 or more workers redundant across their whole business, rather than only when the numbers reached 20 in one unit, such as an individual retail store.

The matter dates back to 2008, when high street chain Woolworths entered administration and thousands of its staff were made redundant. Another retailer, Ethel Austin, was also forced to make employees redundant across multiple branches two years later.

“Establishments” in collective redundancy consultations

Further, detailed analysis of the ECJ decision is available here.

Shopworkers’ union Usdaw brought the case to tribunal after thousands of staff at both chains complained that they were denied a consultation period because they worked in smaller shops.

The tribunal decided that, in this case, “at one establishment” should not apply and the workers were due millions of pounds in compensation.

However, following intervention from the UK Government, the case went to the Court of Appeal last November and was immediately referred to the ECJ.

Then, in February, ECJ advocate general Nils Wahl suggested he agreed with the UK Government’s stance and that decisions on collective redundancy should be left to the national courts.

He inferred that the focus should be on whether or not there are 20 redundancies in the “local employment unit”, which could be the single store in an area, but could also be a number of stores in the local area.

The ECJ decision is welcome news for employers, unsure of whether or not they were duty-bound to consult in every location that they operate, making the redundancy consultation process more drawn out and expensive.

John Hannett, Usdaw general secretary said: “This decision marks the end of the road for our members from Woolworths and Ethel Austin seeking justice and they are heartbroken by today’s verdict.

“Our case is morally and logically robust, so today’s verdict is a kick in the teeth. It is unfair and makes no sense that workers in stores of less than 20 employees were denied compensation, whereas their colleagues in larger stores did qualify for the award.

He added: “We can now only pin our hopes on the election of a Labour government to prevent this happening again to other workers in small stores who are made redundant without proper consultation.”

Christopher Tutton, employment partner at Irwin Mitchell, said: “We have now gone full circle and re-established the ‘establishment’ test.

“Although it is not a huge surprise, with the court following the guidance from the advocate general in February, it will certainly provide relief for businesses, particularly those with multiple sites, and greater certainty on an already complex area of law.”

He added: “Last month, the Insolvency Service published a call for evidence on the collective redundancy rules for employers facing insolvency. Although the Woolworths decision has provided some comfort for business owners in the meantime, a wider policy review on this area of law will be welcome.”

Martin Warren, head of employment law at Eversheds, said that the approach taken by the EAT added little value to many employees.

“All employers, big and small, are already expected to consult with individual employees in redundancy situations. Collective consultation with employee representatives, the subject of this case, is an additional duty, aimed at larger-scale redundancies sharing common reasons,” he said.

Judgment in a similar case referred to the Belfast Industrial Tribunal, in connection with clothing chain Bonmarché, will be delivered on 13 May.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

A more detailed analysis of the ECJ decision is available on XpertHR.

Additional reporting by Jo Faragher and Rob Moss.

Stephen Simpson

Stephen Simpson is Principal HR Strategy and Practice Editor at Brightmine. His areas of responsibility include the policies and documents and law reports. After obtaining a law degree and training to be a solicitor, he moved into publishing, initially with Butterworths. He joined Brightmine in its early days in 2001.

previous post
Want to provide a great HR service? Borrow it from IT
next post
Fujitsu aligns talent management to business strategy

You may also like

Consultation launched after Supreme Court ‘sex’ ruling

20 May 2025

EHRC bows to pressure and extends gender consultation

15 May 2025

Tribunal finds need for degree in redundancy selection...

14 May 2025

Construction workers win compensation claim against defunct employer

9 May 2025

‘Unacceptable to question integrity’ of Supreme Court judgment

2 May 2025

Trans ex-judge to appeal Supreme Court biological sex...

29 Apr 2025

EHRC: Interim update on single-sex spaces draws criticism

28 Apr 2025

British Steel puts brakes on redundancy process

23 Apr 2025

Opposition to Supreme Court sex ruling is ‘wishful...

22 Apr 2025

Supreme Court transgender ruling: ‘common sense’ or ‘incredibly...

17 Apr 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+