Employment Review: May 2015 – ECJ clarifies the meaning of ‘establishment’ for collective redundancy purposes

The European Court of Justice (ECJ) has provided its decision in the long-running Woolworths and Ethel Austin cases (USDAW and anor v VW Realisation 1 Ltd and others).

Agreeing with the opinion of the Advocate General (which we reported in March’s review), the ECJ has clarified that the term ‘establishment’ for the purposes of collective consultation means the entity to which a worker made redundant is assigned to carry out their duties and not to the employer as a whole.

Although it remains for the Court of Appeal to rule definitively in the case, the ECJ’s judgment makes it clear that the Tribunals were entitled to regard each store as a separate establishment. Subject to final confirmation by the Court of Appeal, this will mean that when looking at whether proposed redundancies trigger the need for collective consultation, and for how long, employers will only need to consider how many employees are affected at each individual workplace. So for a retailer, for example, this is likely to mean each individual shop. This decision therefore avoids some potentially very significant complications in terms of collective consultation, especially for large organisations.

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