UK: ECJ follows Advocate General's opinion and reinstates previous law on collective redundancy threshold

The European Court of Justice has given its judgment in the case of USDAW v Woolworths on the trigger for collective redundancy consultation obligations. In welcome news for multi-site employers, the Court has ruled that, when applying the threshold for consultation of 20 or more proposed redundancies “at one establishment” over a 90 day period, EU law does not require the proposed redundancies to be aggregated across all of an employer’s separate employment units.

The Court ruled that the concept of "establishment" must be interpreted in an autonomous and uniform manner across the EU. Where an undertaking comprises several entities, it is the entity to which the workers made redundant are assigned to carry out their duties that constitutes the ‘establishment’. The case will now return to the Court of Appeal to apply the 'establishment' test to the facts.

The ruling is likely to lead to a renewed focus on the meaning of 'establishment'. The Advocate-General in this case commented 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”.

USDAW's response is to seek legislative change to protect employees at smaller sites. Its website notes that "Labour has pledged legislation so that in large-scale redundancy situations, workers from all workplaces affected will be treated as part of the same consultation, in line with the EAT decision on Woolworths and Ethel Austin".

Meanwhile, in another case concerning the collective redundancy threshold, the Supreme Court has overturned the Court of Appeal and ruled that the expiry and non-renewal of fixed term contracts did count towards the threshold in pre-2013 legislation. The ruling is of largely academic interest as the law was amended in 2013 to exclude such terminations from counting towards the threshold. However, employers should note that terminations of fixed-term employees for redundancy prior to the expiry of the fixed term will still count, and in any case they may also need to carry out individual consultation about non-renewal. (University and College Union v University of Stirling)