Collective consultation and redundancy – when it is required?

Posted by: Clare Nicolaou Employment lawyer,  Novalex Solicitors

There’s good news for employers this week.

Under UK law employers proposing to make more than 20 people redundant at one establishment within a 90 day period have to enter into collective consultation. This means the employer must consult with either its trade unions or elected representatives with a view to reaching agreement on its proposals.

However, in 2013 the Employment Appeal Tribunal put a spanner in the works during the cases collectively known as the Woolworths cases, which arose out of the insolvent administrations of Woolworths and Ethel Austin. They decided that the term ‘establishment’ could mean all of the employer’s establishments.

So, in a case where an employer had 40 shops across the UK and proposed redundancies in a number of them that would come to more than 20 in total, the collective consultation obligations would apply.

The cases were referred to the Advocate General, who has confirmed that in his opinion there is no requirement to look at the total number of establishments in which redundancies are being proposed.  It is enough just to take each establishment on its own.

It is worth noting that the Advocate General’s opinion is not binding and the European Court of Justice will now need to consider the matter and issue a judgment, but in most cases it has come to the same conclusion after the Advocate General has waded in to assist.

We will be watching this space in anticipation!

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