Union slams decision to re-visit case which set a new legal precedent
A court has given the go-ahead for the government to appeal the landmark ruling on collective redundancy made earlier this year.
The Employment Appeal Tribunal (EAT) has granted the Department for Business, Innovation and Skills (BIS) the right to appeal against a decision, which offered compensation to workers affected by collective redundancy when their employers failed to follow the proper consultation procedures.
In May this year, thousands of former employees of Woolworths and Ethel Austin won payouts after the EAT ruled that the companies’ administrators did not consult fully with representatives over job losses when the businesses were going into administration.
Around 1,200 Ethel Austin staff and 3,200 Woolworths workers had missed out on compensation awarded to their colleagues, because fewer than 20 staff had been affected in the stores where they worked. This meant that technically, they were not covered by legislation around collective redundancy.
However, the EAT’s decision in May created a legal precedent where collective redundancy consultations would not be limited to lay-offs “at one establishment”, and the judge ruled that these three words should be deleted from the law. This meant that the affected staff would be entitled to up to eight weeks’ pay at Woolworths and 12 weeks’ pay at Ethel Austin.
Shopworkers’ union Usdaw, which campaigned for the workers to receive compensation over the lack of consultation, is angry at the EAT’s decision to let BIS appeal.
John Hannett, Usdaw’s general secretary, said: “It is particularly galling that the government lodged an appeal after not bothering to attend the EAT hearing. These were mass redundancy situations because the businesses were closing down and it is no fault of the individual workers how small the store was that they worked in.”
“The government should concentrate on encouraging administrators to focus on keeping businesses open, not supporting their failure to properly consult with workers, as required under law.”
Catherine Wilson, head of employment at law firm Thomas Eggar, said: “We are surprised that this is happening now and that the government did not react to this earlier, given the importance of the EAT case and its implications.”
“Employers now have to aggregate all of their possible redundancies across all of their establishments, which can be logistically difficult. We advise employers to take a cautious view and an inclusive approach if considering redundancy, considering how many people will be going across the business rather than focusing on one department.”
She added that if the government was successful in overturning the EAT’s decision to compensate the workers, the legal situation would revert to as it was before. The “at one establishment” rule would apply, and fewer than 20 redundancies at one branch or office would not require a formal consultation process.