Number of Establishments Irrelevant in Collective Redundancies?

In the landmark decision of USDAW & Others v WW Realisation 1 Ltd (in administration) and another UKEAT/0547 & 0548/2012, the Employment Appeal Tribunal (EAT) held that collective consultation obligations are triggered when an employer proposes to dismiss as redundant 20 or more employees in a 90-day period irrespective of the number of establishments in which the employees are located.

Former employees of the insolvent Woolworths and USDAW (a trade union) brought claims against Woolworths' administrator in respect of its failure to consult collectively with them. The Employment Tribunal found that each store was a separate establishment for the purposes of UK collective redundancy legislation, which provides that employers are only obliged to consult collectively with employees where they propose to dismiss as redundant 20 or more employees at one establishment within a 90-day period. Therefore, the duty to consult had not been triggered in respect of the dismissals in the stores with fewer than 20 employees.

The EAT overturned this decision and held that UK collective redundancy legislation was incompatible with European law (to which it must defer) which did not require the dismissals to be at "one establishment" and that this requirement should therefore be disregarded. The duty to consult collectively had been triggered as there were more than 20 employees dismissed in a 90-day period throughout all the Woolworths stores. As a result, all the affected former employees (of which there were over 3,000) were entitled to a protective award of 90 days' pay each.

Given the huge ramifications of this case, it is likely to be appealed. In the meantime, employers who are proposing to dismiss 20 or more employees within a 90-day period should comply with the collective consultation requirements regardless of the location of the dismissals.