Government wins right to appeal Woolworths collective redundancies decision

The Department for Business, Innovation and Skills (BIS) has been granted permission to appeal this summer’s judgment by the Employment Appeal Tribunal (EAT) in the Usdaw v Woolworths case that deemed that collective redundancies need not be “at one establishment” for there to be a requirement for the employer to consult.

In his judgment of 2 July 2013, EAT judge Jeremy McMullen said the words “at one establishment” should be deleted from the law requiring organisations to consult with employees when 20 or more redundancies are taking place in a 90-day period.

A BIS spokesperson told Personnel Today in July: “The reason for appealing this judgment, is that in reaching its decision we think the EAT has got the law wrong and it is our view that the decision will have wider implications.”

That appeal has now been granted by the EAT, to the anger of the shopkeepers’ union Usdaw. Today John Hannett, Usdaw general secretary, said: “We are very angry that this appeal has been permitted, but we will again fight the case in the Court of Appeal for the 1,200 former employees of Ethel Austin and 3,200 former employees of Woolworths who were denied an award purely on the basis of the number of staff working at each individual store.”

In the judgment transcript, judge Jeremy McMullen pointed out that BIS attended none of the proceedings nor did it send representatives: “It was said by the Insolvency Service that the secretary of state would not attend or comment ‘as he has nothing to usefully contribute about the consultation process between the parties’. That was his stance at the Woolworths employment tribunal hearing. It appears, sadly, to misunderstand the legal issue in these appeals and its importance.”

BIS has since said: “The secretary of state is sometimes joined as a respondent in protective award claims. This is because under legislation, the secretary of state guarantees the payment of protective awards made in favour of employees whose employer is insolvent, up to a certain amount. The department does not make representations in such cases as a general rule.”

Stephen Simpson, senior employment law editor at XpertHR said: “This is without doubt the most important employment case of the last few years. It has placed an extra burden on employers carrying out larger-scale redundancies. The Government’s decision not to attend the EAT case in which it was a respondent raised more than a few eyebrows, given its oft-stated commitment to preventing employment law burdens on businesses.

“Perhaps the Government was expecting the EAT to refer the case to Europe, which surprisingly the EAT didn’t do. The Government’s belated decision to get involved in the case suggests that it has woken up to its importance for employers.”

Although the EAT gave permission to appeal, it has ordered that Usdaw’s legal costs are paid by BIS because of its failure to attend the original appeal hearing.

This article has been adapted from an original article on 23 July 2013, which confirmed that the government had requested leave to appeal the ruling.


XpertHR Resources

More detailed analysis of the EAT judgment and the potential implications for employers are outlined in this XpertHR report.

XpertHR also has commentary on a separate case, Lyttle and others v Bluebird UK Bidco 2 Ltd, which has been referred to the ECJ for guidance on the meaning of “establishment”.

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