The European Court Gives Decision On Woolworths Case

UK law requires an employer to collectively consult when it proposes to make 20 or more redundancies at one establishment within a 90-day period. The Woolworths case looked at the meaning of “establishment”. Before the case, the approach was often taken that collective consultation was only required if 20 or more employees were at risk of redundancy within one specific site or branch.

However, in the Woolworths case the Employment Appeal Tribunal determined that the meaning of “establishment” was such that employees in Woolworths stores where there were fewer than 20 employees should have been consulted on a collective basis.  This decision was appealed and the Court of Appeal referred the matter to the European Court.

The European Court has now delivered its decision and determined that where an undertaking comprises several entities the meaning of “establishment” is “the entity to which the workers made redundant are assignment to carry out their duties”. The case will now be referred back to the Court of Appeal for determination.

The decision of the European Court will come as a relief to many employers given that there is now some certainty (subject to the Court of Appeal’s decision) that collective consultation obligations in redundancy situations will not be triggered where less than 20 employees are being made redundant at one location. 

In this case it is therefore likely that the Court of Appeal will determine that each individual Woolworths store will be a separate establishment and where a store had less than 20 employees, those employees were not entitled to be consulted on a collective basis. They would therefore not be entitled to a protective award.