29th April 2015
Meaning of “Establishment”: The Woolworths case.
Those employers who operate multiple sites can breathe a sigh of relief as a result of the ECJ's Judgment which has just been published on the meaning of "Establishment" for the purposes of the collective redundancy consultation processes.
For quite a while now there has been uncertainty as to whether, when making redundancies, there is a need to aggregate all proposed redundancies at each of the employer's sites, to decide whether the magic number of 20 has been reached. If it has, employers have not known for sure whether there is then a need to carry out a collective consultation process with either elected reps or a recognised trade union.
So, if an employer is proposing to dismiss say 10 people at one site, and 12 at another site, if the meaning of "Establishment" in the relevant laws means all sites of the employer, the obligation to carry out a collective redundancy consultation process with reps would arise (and failure to do so would render the employer liable for protective awards of up to 13 weeks pay per employee).
However, if the meaning of "Establishment" is taken to be each site, in this example the obligation would not arise, and instead individual consultations would take place as normal.
The ECJ however has now, finally, ended this uncertainty, and found that, for these purposes, the employer simply needs to look at each site in isolation.