05 June 2013

Collective consultation - 'an establishment'

You may have been receiving email alerts from some law firms concerning the case of USDAW and others v WW Realisation 1 Limited (in Liquidation) and another.

The case concerns whether Woolworth stores, or the entire Woolworths retail operation, were one establishment for collective consultation purposes. The ET found that the individual stores were separate establishments but reports indicate that this has been overturned by the EAT, which, apparently, has held that the UK are not compliant with European law with regard to the interpretation of 'establishment'.

We understand that the EAT's full written judgment will not be available for a couple of weeks, so we are not in a position to comment in detail on the case, but on the face of it this may be a complete departure from the current interpretation of collective consultation law. Whilst the full judgment is not yet available, in the meantime, it may be interesting to note that the cases below, which were heard by the Court of Justice of the European Union (CJEU), were referred to by the Government in their Consultation on collective redundancies last year but no changes were deemed to be necessary to domestic law.

Rockfon A/S v Specialarbejderforbundet i Danmark the CJEU held that, depending on the circumstances, 'establishment' means the unit to which workers are assigned to carry out their duties. For there to be an 'establishment', it is not essential for the unit in question to have management that is capable of independently making collective redundancies.

Athinaiki Chartopoiia AE v Panagiotidis and others the CJEU held that "an 'establishment', in the context of an undertaking, should be interpreted very broadly in order to limit as far as possible cases of collective redundancies which are not subject to the Directive. An establishment may consist of a distinct entity that has a certain degree of permanence and stability, which is assigned to perform one or more given tasks and which has a workforce, technical means, and a certain organisational structure to allow it to do so."

We will update you once the full written judgment becomes available.

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