The case dates back to 2008, when former employees at Woolworths and Ethel Austin lost their jobs but were not collectively consulted. Unions acting on their behalf brought the case to tribunal, as thousands of staff at both chains claimed they were denied a consultation period due to working in smaller shops, while their employees in larger outlets did receive consultation.
The appeal was successful and in 2013 the EAT ruled ‘at one establishment’ must be disregarded for collective redundancy involving 20 or more members of staff. Employees at the smaller stores received millions in compensation.
The advocate general’s decision yesterday appears to overturn the EAT’s 2013 decision, if the ECJ agrees.
Nicola Kerr, head of employment at international law firm King & Wood Mallesons, said employers could “breathe a sigh of relief” as the decision is “a good indicator” of the ECJ’s final decision.
She said: “Collective consultation is not only time-consuming – delaying redundancies by at least 30 or 45 days, depending on numbers – but can also be a huge drain on management time.
“If this opinion is followed by the courts, employers will be obliged to count only those redundancies occurring in each local establishment in deciding whether the magic number of 20 – which triggers collective consultation – is reached. This will mean fewer collective consultation exercises and fewer burdens on employers.”
Taylor Wessing employment lawyer Emma Zarb said employers are still likely to take a “better safe than sorry” approach until the ECJ gives its final ruling.
She added: “Should the ECJ follow the advocate general's opinion, businesses will be able to revert back to the standard approach taken since the Seventies, and look at any planned redundancy in isolation. This means less red tape and will allow employers, in some instances, to carry out more straightforward restructurings."
However, although this is good news for employers, Irwin Mitchell employment partner Omer Simjee added: “Thousands of employees affected by the case will be hugely disappointed as the chances are they will lose their claims for compensation if the UK court follows the advocate general’s recommendation.”
The CBI welcomed the news. Deputy director-general Katja Hall said: “This will provide a welcome boost to UK businesses, by reducing the administrative burden that had forced them to undertake numerous redundancy consultations.”