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Group Consultation on Redundancy

Posted on May 01, 2015

1 May 2015Group Consultation for Redundancy:

Where an employer proposes to make 20 or more redundancies at a particular establishment within a period of 90 days it must consult on its proposal with representatives of the affected employees. Consultation will be:

 

  • 20 or more employees – at least 30 days before dismissal
  • 100 or more employees – 45 or more days

 

Failure to do so can result in a “protective award” of up to 90 days’ gross actual pay for each affected employee.

 

In USDAW and anor v VW Realisation 1 Ltd, the European Court of Justice considered what ‘establishment’ meant in the context of collective redundancy consultation. The ECJ has held that ‘establishment’, means the ‘entity’ to which the worker is assigned, for example individual shops in a chain of shops. There would be no need to lump all of the shops together and aggregate their workforce for the 20 or more employee threshold.

 

Dozens of Woolworths stores across the UK closed after it went into administration, resulting in the dismissals for redundancy of thousands of employees and the union sought protective awards for a failure to consult.

 

Was group consultation necessary for stores where fewer than 20 employees worked in each store? ‘No’ is the answer from the ECJ. Each store was effectively a separate ‘establishment’.

 

Large employers will take comfort from this decision but consultation still needs to take place with individuals when less than 20 people are affected, otherwise the consequent redundancies might be unfair.

 

For redundancy advice from a lawyer give us a call today on 0207 118 0950 or email info@reculversolicitors.co.uk.  See also our page on redundancy.

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