Collective Redundancy: An Update

The Trade Union and Labour Relations (Consolidation) Act 1992 imposes collective redundancy consultation requirements on employers wishing to make 20 or more redundancies “at one establishment” within a 90 day period. In the recent case of USDAW v Ethel Austin (known as ‘ the Woolworths case’) the EAT held that the words “at one establishment” should be disregarded to give full effect to the requirements of the EU Directive on collective redundancies. This interpretation imposes collective consultation obligations on employers planning to dismiss 20 or more employees within 90 days on the grounds of redundancy, regardless of the number of sites involved. In January 2014 the Court of Appeal referred the matter to the Court of Justice of the European Union.

The Woolworth’s ruling has clear ramifications for any employer looking to make 20 or more redundancies at different sites within a 90 day period. Citation’s Head of Employment Law & HR Services, Andrea O’Hare, commented – “Until such time as further clarification is given by the Court of Justice, employers would be wise to consider redundancy numbers across their business rather than on a site by site basis when assessing whether collective consultation provisions will apply as the penalty for non-compliance can be up to 90 days gross pay per affected employee”.

Citation are able to offer a full HR services with regards to the legal obligations of an employer planning staff redundancies. Keep an eye on the Citation News pages for further updates on this case.