Following our post on the ramifications of the £5 million redundancy payout, the Secretary of State has been given permission to go to the Court of Appeal following the Employment Appeal Tribunal’s decision in USDAW v Woolworths.
The ‘Woolworths’ decision marked a major change to the collective redundancy consultation regime. Previously, collective consultation only applied where 20 or more redundancies were proposed in a 90 day period at a single establishment. When the administrators of Woolworths and Ethel Austin made employees redundant, it did not collectively consult with 3,000 of the employees, on the basis that these employees worked at stores with less than 20 employees. Those employees pursued claims for protective awards claiming that the requirement for the number of redundancies to take place in one establishment was not compatible with European law. They argued that collective consultation should take place where 20 or more redundancies were proposed, regardless of the location of those redundancies. If the employees were right, the value of their protective award claims was significant; 13 weeks gross (uncapped) pay per employee.
The Employment Tribunal found against the employees, but the Employment Appeal Tribunal disagreed and upheld their claims. At the Employment Tribunal and the Employment Appeal Tribunal, the Secretary of State did not take part in the proceedings, despite the massive consequences that the decision would have. It appears that he has now seen the error of his ways, and in seeking permission to appeal has “apologised to the EAT for the failure to participate in this case at an earlier stage” explaining that he did not appreciate the “wide importance” of the issues raised by the case.
Permission to appeal has been given, however the Employment Appeal Tribunal has ordered that the Secretary of State pay the Union’s reasonable costs in the Court of Appeal.
So what are the effects of this decision? At around the same time as the Woolworths case was being heard, a similar case (Lyttle v Bluebird UK Bidco Limited) was heard by the Belfast Industrial Tribunal. The same question was posed in that case, but the Belfast Tribunal did not feel able to decide whether or not the UK legislation was compatible with European Law. The Belfast Tribunal referred the matter to the European Court of Justice. Due to this it is understood that the Secretary of State has already put in an application that the Woolworths appeal be stayed . However the application is being resisted by USDAW who consider that the Woolworths case raises some unique issues that need to be addressed.
Whether the Court of Appeal decides the Woolworths case is to be stayed or that it should also go to the European Court it appears that the problems the case causes employers will remain unresolved for a long time yet.
Further updates as and when they occur will be posted on this blog, but in the meantime should you have any queries regarding redundancies and in particular whether you need to collectively consult, email firstname.lastname@example.org.