It seems that barely a day passes without further reports of job losses on the High Street, a reflection of the changes in our shopping habits and our increasingly busy lifestyles.
Organisations considering closures of one or more of their branches may, of course, trigger collective consultation obligations in respect of any ensuing redundancies. Recent announcements about further closures on the High Street come hot on the heels of the news that the European Court of Justice (ECJ) is due to hear the ‘Woolworth’s appeal’ on Thursday, 20 November 2014. This case concerned the closure of certain stores of the retail chains, Woolworths and Ethel Austin, in which fewer than 20 employees worked, as detailed in previous blog posts.
The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) (Section 188), which governs the duties of UK employers in collective redundancy scenarios, states that an employer is obliged to collectively consult if it “is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less”.
To the surprise of employment lawyers and HR practitioners up and down the country, the Employment Appeal Tribunal (EAT) held that the employees in the Woolworths and Ethel Austin stores were entitled to be collectively consulted. This was despite there being less than 20 employees at the establishments in question.
The EAT considered that the words ‘at one establishment’, in section 188 of TULRCA, were incompatible with the underlying EU Collective Redundancies Directive and, therefore, held that these words should be disregarded for the purposes of any collective redundancy involving 20 or more employees.
This caused great debate; the decision dramatically disturbed what was considered to be a clear position and significantly extended the scope of an employer’s collective consultation duties. The decision meant that 20 or more redundancies do not have to be at one establishment (such as a specific shop or office) for the duty to arise.
The Court of Appeal decided to refer the issue to the ECJ and we wait to hear whether the EAT’s approach is endorsed. Unfortunately, past ECJ cases indicate the decision may not be available for several months yet, but we will of course report the outcome as it becomes available.