Big payout for Woolworths’ ex-employees

10 September 2013

These rules are supposed to be the UK’s implementation of the European Collective Redundancies Directive, but Usdaw, the shopworkers’ union, challenged this at the EAT on behalf of 3,233 ex-Woolworths (in liquidation) and 1,210 ex-Ethel Austin (in receivership) employees. These employees had not been consulted about redundancies because they worked in shops employing less than 20.

Usdaw’s case was that the EU Collective Redundancies Directive gives two alternatives for the consultation ‘trigger’ – one based on the number/percentage of employees being made redundant by the employer at one establishment within 30 days; and one where the employer plans on making 20 or more redundancies within 90 days, whatever the number of workers normally employed in the employer’s establishments. However, the UK had made a hybrid from these two alternatives, taking “at one establishment” from the first alternative and “20 or more within 90 days” from the second which, Usdaw argued, was not permitted.

This argument was accepted by the EAT, which determined that the UK rules fell short of those required by the EU Directive, and held that the UK rules should be given a ‘purposive’ construction by disregarding the words “at one establishment” in the UK rules so that they complied with the EU Directive.

An application has been made to the EAT for permission to appeal the ruling and, unless the ruling is overturned, the 4,400-odd ex-employees will each receive a ‘protective award’ of up to 90 days’ pay for the failure to consult.

A similar Industrial Tribunal case in Northern Ireland (the ‘Bonmarche’ case) has been referred to the Court of Justice of the European Union for a determination on the legality of the UK’s “20 or more at one establishment” wording.

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