An employer contemplating collective redundancies in ‘establishments’ is required by the European Directive on collective redundancies to consult with workers’ representatives, whereas under UK law employers must consult collectively when 20 or more redundancies are proposed at one ‘establishment’. The clear difference is that for the duty to be triggered, EU law applies even though the dismissals may be at different establishments, but in the UK the 20, or more, dismissals have to be ‘at one establishment’.

In USDAW v Ethel Wilson Ltd (in administration) and Woolworths, when Woolworths became insolvent, an employment tribunal decided that each store was a separate establishment. Therefore, the duty to consult did not apply to any store with fewer than 20 employees, meaning that over 3,000 former employees could not receive a protective award for a failure to consult. The EAT ruled that the words “at one establishment” are henceforth to be disregarded for the purposes of any collective redundancy involving 20 or more employees, meaning that once there is a proposal to make 20, or more, employees in a business redundant, their location becomes irrelevant. As an example, if a retailer is closing 30 stores, and employs fewer than 20 staff in each location, this ruling by the EAT means that there will now be a duty to consult collectively about redundancies in all 30 stores, whereas beforehand there would not have been any duty to consult collectively at all. This marks a significant change in the law as the rule now is that the collective redundancy consultation trigger is a proposal to make 20, or more, employees redundant, irrespective of where they work.