So that turned out to be a lot of fuss about not very much, didn’t it?
USDAW – v – Ethel Austin, better known as the Woolworths case, was a challenge by trade union USDAW to the established reading of Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. This requires collective information and consultation when at least 20 redundancies are proposed at any one establishment. Historically, “establishment” had been read as “site”, but USDAW argued that it should mean the whole employer. That would require multi-sited employers to consider the number of redundancies being proposed across their entire network, not just per location. This was not solely an exercise in academic one-uppery – the union was seeking failure-to-consult protective awards for several thousand employees made redundant on the 2008 collapse of retailers Woolworths and Ethel Austin who had worked at sites with less than 20 staff.
USDAW’s European adventure ended in the European Court of Justice this morning, where the Court found that “establishment” in the collective redundancy legislation means the site where the employee works, and not the employer as a whole. Whether you get to the 20 redundancy trigger point is therefore to be determined by reference to that site alone.
What this decision does not do is alter the considerations taken into account in determining whether a work location is an establishment in the first place. Not all are. It will still be necessary for the employer to show that the site has the necessary degree of autonomy and permanence to qualify. Are staff contractually assigned there? Does it have its own customers, equipment, P&L? Does it have its own management (even if they then report up to HQ), or its own Legal or HR or IT support staff? A small branch of a retail chain will easily satisfy this test, but a company’s presence on a building site, a pop-up store, a site which is no more than a mail-drop, etc., may well not do so.
No doubt some politician is even now trying feverishly to work out whether this reflects well or badly upon our EU membership (common sense is now restored, but on the other hand the issue would not have arisen at all were it not for the EU Collective Redundancies Directive). Employers by contrast, need not spend any more time on this beyond noting that the approach which they had taken to collective redundancy consultation before Woolworths (and in many cases since it, the alternative being too administratively hideous to contemplate) is now again approved practice. While there remains the hurdle of a formal domestic ruling on this by the Court of Appeal, it is almost impossible to conceive that their Lordships will look this particular gift horse in the mouth. A return to the pre-Woolworths days seems inevitable.