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Advocate General’s Opinion on collective redundancy consultation published

The Advocate General has this morning published his Opinion in the ‘Woolworths’ collective redundancy case.  Alice Cave set out the background to date in her recent post.  The Opinion can be found here.

The core question is the scope of the concept of ‘establishment’ in the context of assessing the requirement for collective redundancy consultation.  This is the concept with which the EAT had wrestled, and come up with bold conclusions.  The questions before the AG focussed on whether the phrase ‘at least 20 employees’ refers to the number of dismissals across all an employer’s establishments, or to each individual establishment.  What is the meaning of ‘establishment’ – should it be the whole of the relevant business, or the unit to which the worker is assigned their duties?

The Opinion sets out a useful analysis of the genesis of the arguments and refers specifically to the socio-economic effect of collective redundancies in a local context – a national as opposed to localised approach to the question of ‘establishment’ may mask the impact of significant numbers of redundancies on the immediate local area.  The AG concludes that the concept of ‘establishment’ under the Directive must be construed as denoting the unit to which the workers made redundant are assigned to carry out their duties.   The Directive ‘neither requires nor precludes’ an aggregation of the number of dismissals in all the employer’s establishments for the purposes of verifying whether the relevant numerical thresholds have been met.  It is up to member states to decide, where appropriate, whether to increase the level of protection available: provided that on every occasion (and not simply on average) by so doing, more favourable treatment is afforded to the redundant employees than the baseline protection under the Directive.  The national courts need to verify whether or not this is the case.

Paragraph 62 reminds us that it is a factual matter for the national courts to determine how the ‘local’ establishment is constituted in each situation.  We are given the example of an employer operating several stores in one shopping centre – these stores could be regarded as forming a single local employment unit, depending on their degree of permanence/stability, organisational structure and workforce arrangements.  It is not necessary for the entity to ‘have legal, economic, financial, administrative or technological autonomy in order to be regarded as an establishment’.

So, we are pretty much back where we started – for collective redundancy purposes, an establishment is the unit to which the workers made redundant are assigned, and the definition of that unit is a factual matter for the courts to determine.  Hope that clears things up: we’re basically back to square one, the UK law in this area is consistent with the Directive and the EAT decision was incorrect.  The usual caveat – the AG’s opinion is not binding on the ECJ who will not hand down final judgment until later in the year (summer at the earliest, I understand).  But it is in most cases a reasonable pointer, and in this case my best guess is that (for any number of reasons) it will probably be followed. 

This is clearly good news for employers, albeit it does leave open questions as to how to deal with the issue in the interim.  The EAT 'aggregate' approach remains good law in the UK, though employers may feel a little bolder in disregarding it in light of this Opinion.  The Court of Appeal will need to consider the ECJ decision so it will be a while until we have absolute clarity on the point.  In the interim, multi-site employers should continue to approach collective redundancies on a case by case basis, remembering also that whatever the position on the collective consultation trigger, the minimum time periods for consultation (30 or 45 days) and the form HR1 requirement are still assessed on a localised establishment basis.

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