Collective Consultancy Clarification?

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10 Feb 2015

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  Today’s opinion from the Court of Justice of the European Union Advocate General Wahl brings the UK one step closer to clarifying the collective redundancy consultation trigger and on the face of it looks like good news for employers says HR experts, Croner, part of global information services business, Wolters Kluwer. Amy Paxton, Croner Employment Manager and Senior Legal Advisor at Wolters Kluwer, says: “The Advocate General has today given the opinion that the trigger for collective consultancy should be 20 employees per establishment, meaning local employment unit and not per employer. The opinion means that the Directive does not require employers to tot up the number of proposed dismissals across all of their establishments for the purpose of triggering the duty to consult collectively. This is good news for UK business many of whom thought that the Advocate General would make his decision in line with other European domestic legislation. “His decision goes against the findings of the EAT which cast doubt as to whether the UK had correctly interpreted the European directive from which domestic law relating to collective redundancy stems from. Many are surprised by today’s opinion, however we would stress that it is only an opinion, not the final judgment of the CJEU, which is expected to be published later this year. However, there aren’t many occasions when the Court does not follow the Advocate-General’s opinion.” The opinion follows long-standing legal action in the USDAW v Ethel Austin Ltd case. The Insolvency of retail chains Woolworths and Ethel Austin Ltd resulted in the loss of several thousand jobs, claims were brought in the employment tribunal alleging a failure to comply with the duty to carry out collective consultation under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A). Section 188 states that the duty to consult representatives in the event of proposed redundancies arises where the employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. The meaning of the phrase “at one establishment” in this context is critical, as many of Woolworths’ and Ethel Austin’s stores had fewer than 20 employees. The tribunal found in the first instance that each individual store constituted a discrete establishment for the purposes of collective consultation, and so the employees based at these small stores had no remedy as the duty to consult collectively had not been activated. On appeal at the EAT, the judgment was rejected. Referring to EU law, the EAT held that section 188 of (TULR(C)A) was more restrictive than the relevant provision in the EU Collective Redundancies Directive, and so a purposive interpretation was required in order to disapply that restriction. The EAT therefore judged that it was appropriate to delete the words “at one establishment” from section 188 so as to give effect to the Directive. Both the Woolworths and Ethel Austin cases were subsequently appealed to the Court of Appeal who made a reference to the Court of Justice of the European Union to establish what the EU Collective Redundancy Directive Requires. The case was joined with the cases of Lytlle and ors v Bluebird UK Bidco and the Spanish case of Rabal. The case was heard on 20 November. It is expected that the final decision by the CJEU will take some months to be published.

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