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The meaning of establishment

Posted on 25th March 2015
Case law

Who should be collectively consulted?

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employers do not need to look at the organisation as a whole (an ‘undertaking’) but rather the ‘local employment unit’ to which employees are assigned to carry out their duties (an ‘establishment’)

USDAW v Ethel Austin Ltd & ors (The Woolworths case) 2015 Advocate General

The facts

Woolworths and Ethel Austin went into administration in 2008 and 2010 respectively. In excess of 28,000 employees were dismissed for redundancy from numerous stores across the country. In the region of 4,400 workers were dismissed from stores where there were fewer than 20 employees employed at that store.

Claims were brought by former employees that Woolworths and Ethel Austin failed to collectively inform and consult with them in breach of TULRCA. The employees claimed protective awards.

The EAT decided that Woolworths and Ethel Austin should have consulted with all employees, not just those who were employed at stores with 20 or more employees. All the employees at the smaller stores were, therefore, entitled to the protective award.

The Advocate General opinion

The Advocate General has given his opinion that the EAT’s decision is wrong. In his view, employers do not need to look at the organisation as a whole (an ‘undertaking’) but rather the ‘local employment unit’ to which employees are assigned to carry out their duties (an ‘establishment’). He considered the protection was in place to guard against large scale redundancies in a local area.

Comment

This opinion is not binding and may not be followed by the ECJ when they give their decision in due course. Until then, and assuming the opinion is followed (not always the case) the EAT decision is the current statement of law and must be followed.

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