“At one establishment” rule for collective redundancies dismissed at EAT

03 July 2013

A landmark Employment Appeals Tribunal case has decreed that collective redundancies involving workers across multiple “establishments” must still involve consultation with trade unions.

The issue of whether the 20 worker-threshold for mass redundancy before workers’ representatives are to be consulted applies to each “establishment” (or branch), or to the company as a whole, became key when Woolworths went bankrupt.

Usdaw and Unite represented thousands of workers who lost their jobs due to the insolvency in the recent case, the full decision for which is yet to be published. Around 3,000 employees working at branches with fewer than 20 staff were not awarded the 60 days’ pay granted to their colleagues in shops that employed 20 people or more. Woolworths argued it was not obliged to collectively consult where a shop with fewer than 20 staff is closed, because the Trade Union and Labour Relations (Consolidation) Act 1992 says consultation should only take place where 20 or more workers are based “at one establishment”.

The EAT decided to ignore this phrasing during the case, with the potential for significant and positive implications for the future of UK law.