Anger as govt appeals against trade union win on mass redundancy

18 September 2013

The government has won the right to appeal against an employment tribunal decision that could have a major impact on employment law.

In January 2012, almost £70 million was paid out to 25,000 ex-Woolworths and Ethel Austin staff made redundant following the insolvency of the high street chains. However, around 4,400 former employees were left empty handed due to the way the judge interpreted UK employment law.

Whether or not compensation was due depended on the judge’s interpretation of the Trade Union and Labour Relations (Consolidation) Act 1992, where it is written that companies must consult with staff representatives when mass redundancies are taking place where 20 or more workers are based “at one establishment”. Those who had not received compensation worked in branches where fewer than 20 staff members were based, but whether or not they should be treated differently to former colleagues in larger stores depends on how the word “establishment” is defined.

In May this year, it was decided by an Employment Appeal Tribunal (EAT) that the phrase “at one establishment” should be disregarded and Usdaw won the right for all former employees of the chains to receive compensation. This judgement would set a powerful precedent in case law for workers, as it would mean all companies making mass redundancies would have to consult with trade unions regardless of the size of the branches they were closing down.

Unsurprisingly for a government so enamoured with market freedom, the Department for Business, Innovation and Skills (BIS) immediately announced it would try to appeal the case. This week, it was revealed that BIS had won the right to an appeal, although due to the fact that no representative of the department bothered to turn up to the first EAT, it has been ordered to pay Usdaw’s legal fees.

General Secretary of Usdaw John Hannett said: “We are very angry that this appeal has been permitted.”

“These workers were treated unfairly right from the very start by being excluded from the redundancy consultation, further wronged by being denied access to compensation and now face another delay in getting the award they deserve.

“It is particularly galling that the Government lodged an appeal after not bothering to attend the EAT hearing. These were mass redundancy situations because the businesses were closing down and it is no fault of the individual workers how small the store was that they worked in.

“The Government should concentrate on encouraging administrator’s to focus on keeping businesses open, not supporting their failure to properly consult with workers, as required under the law.”