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The ECJ to rule on the meaning of ‘establishment` for collective consultation purposes

05 July 2013 #Employment

Following the Woolworths case there has been a lot of discussion on the meaning of one ‘establishment’ for the purposes of collective redundancy consultations and the consequences of this.

The Northern Ireland Industrial Tribunal has now referred the question to the ECJ for an authoritive ruling.

Northern Ireland have a legal requirement mirroring that of S188 of the Trade Union and Labour Relations (Consolidation) Act 1992 which states that an employer must carry out collective consultation if they are proposing to dismiss more than 20 employees as redundant at one ‘establishment’ within a period of 90 days or less.

The Claimants in this case worked in various Bonmarche stores, some of which were closed following a restructure.  Each store employed less than 20 employees.   Dismissed employees subsequently bought claims for unfair dismissal and failure to collectively consult arguing that one establishment should be interpreted to mean the whole ‘Bonmarche region’ and not the individual stores.

The industrial tribunal recognised that there was case law from the Employment Appeals Tribunal suggesting that an ‘establishment’ should be confined to individual work units but believed that the correct interpretation was still unclear.  Mindful of the consequences for the claimants if the EAT’s decision was followed (their claims for protective awards would fail) it decided to refer the question to the ECJ.  

A decision on this area is much welcome and eagerly awaited, particularly in light of the recent EAT decision in the Woolworths case which adopted a very broad interpretation.  For the implications on Employers of a broad approach see ‘EC law means more collective redundancies for employers’ article.

Clarkslegal, specialist Employment lawyers in London, Reading and throughout the Thames Valley.
For further information about this or any other Employment matter please contact Clarkslegal's employment team by email at by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.
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Louise Keenan

Louise Keenan

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Employment team
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