UK: Pro-employer ECJ Advocate General opinion on test for collective redundancies consultation

A year ago the Court of Appeal referred to the European Court of Justice the case of USDAW v Woolworths on the trigger for collective redundancy consultation obligations for multi-site employers. The UK trigger requires 20 or more proposed redundancies "at one establishment" over a 90 day period.

The EAT had ruled that this trigger did not properly implement EU law, and that the obligation to inform and consult for collective redundancies applies whenever an employer proposes 20 or more redundancies in aggregate even if this is spread across a number of separate workplaces or business units (the EAT ruling is summarised here).

EU law allows member states to choose as the threshold for consultation obligations either (i) 10 dismissals “in establishments” with 21-99 workers, 10% of the total “in establishments” with 100-299 workers, and 30 “in establishments” with at least 300 workers; or (ii) 20 proposed dismissals “whatever the number of workers normally employed in the establishments in question”.

EU caselaw has established that the meaning of 'establishment' in limb (i) is the local employment unit. In his opinion delivered on 5 February 2015, the Advocate General considered that a consistent meaning should be given to the term in both limbs. The rationale for the EU law is to require consultation where redundancies pose a threat to the survival of local communities, hence the focus on the local employment unit was appropriate to both limbs; a consistent approach to the term was also necessary to increase transparency and foreseeability for EU employers.  EU law did not require redundancies to be aggregated across all of an employer's separate employment units when applying the threshold.

The opinion notes that it will be for the national courts to determine the exact constitution of the local employment unit, commenting that "if an employer operates several stores in one shopping centre, it is not inconceivable that all those stores should be regarded as forming a single local employment unit". That will depend on "(i) whether the joint entity in question can be said to have a certain degree of permanence and stability; (ii) whether it is assigned to perform one or more given tasks; and (iii) whether its workforce, technical means and organisational structure are adequate for the accomplishment of those tasks".

If the European Court of Justice follows the Advocate General's opinion when it gives its ruling later this year, this will be welcome news for multi-site employers.