The Wonder of Woolworths

01 Nov

Woolworths collapsed in late 2008 which led to most of their shops closing and around 27,000 people losing their jobs. An issue which arose during the closures was whether separate shops should be counted together for the purposes of collective consultation.

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Woolworths collapsed in late 2008 which led to most of their shops closing and around 27,000 people losing their jobs. An issue which arose during the closures was whether separate shops should be counted together for the purposes of collective consultation. The matter went to the Employment Tribunal and was then appealed to the Employment Appeal Tribunal.

Most employers know that when they are considering dismissing 20 or more employees then they have to collectively consult (S 188 TULRCA1992). In practical terms this means completing an HR1 form, contacting the Trade Union or the workforce representatives and ensuring that the proper information is provided to make the consultation meaningful (see the ACAS Guide online at http://www.acas.org.uk/media/pdf/l/2/pdp-collective-consultation-on-redundancies-accessible-version-July-2011.pdf).

At the end of May 2013 the Employment Appeal Tribunal decided that every site now counts when calculating the 20 employee threshold (see USDAW v Ethel Austin Limited http://www.bailii.org/uk/cases/UKEAT/2013/0547_12_3005.html).

In the past it had been possible to argue that the sites were separate and not part of the same establishment. This is no longer the case. The phrase ‘at one establishment’ has been found to be incompatible with the relevant EU legislation. What this means is that where an employer is proposing to make 20 people or more redundant over two separate sites that employer will be caught by the consultation provisions. The practical impact of this decision is that an employer must keep an eye on what is happening on all its sites when redundancies are being considered.

The Government have belatedly decided to take part in the litigation and were granted leave to appeal this decision in September 2013. The appeal decision is going to be very important for medium sized employers operating over a number of sites so we will update you through our blog and twitter feed as to how this case is progressing.

If you are considering redundancies or being made redundant yourself and you think you might need a little help speak to one of our Team who will be happy to help guide you through the process.

Peter D

For more information on Employment Law, click here.