In our alert, 10 Cases to Look Out for in 2015, we highlighted the Court of Appeal’s referral to the ECJ concerning the EAT’s ruling in USDAW v Ethel Austin Ltd (in administration) and another. The central issue was the interpretation of the collective consultation obligations in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), which apply where an employer is proposing to dismiss as redundant 20 or more employees “at one establishment” within a period of 90 days or less. The EAT ruled that the words “at one establishment” are to be disregarded for the purposes of any collective redundancy involving 20 or more employees in order to comply with the European Collective Redundancies Directive.

In practical terms the following outcomes apply, as an example, where 2 redundancies are being proposed at each of 10 different locations within an organisation: (a) prior to the EAT ruling, under TULRCA, collective consultation would not apply because the threshold of 20 proposed redundancies at ‘one establishment’ had not been met; (b) post the EAT ruling, as there would be 20 proposed redundancies in total, then collective consultation applies, because ‘establishment’ refers to the organisation as a whole, regardless of how many different locations it operates.

So, which interpretation is right under EU law? According to a preliminary opinion delivered by ECJ Advocate General Wahl, it’s (a). In the AG’s opinion, the concept of ‘establishment’ in the Directive means the unit to which the workers made redundant are assigned to carry out their duties, which it is for the national court to determine, but that does not preclude Member States from enacting implementing rules which do not lower the level of minimum protection, and which are more favourable to workers (but he made no comment as to whether TULRCA has this effect). The result is that the threshold trigger point for collective redundancy consultation obligations is the proposed dismissal as redundant of 20 staff in one establishment and not 20 staff across the whole organisation.

What does this mean for employers? Firstly, this is purely the Advocate General’s (AG) opinion, i.e. advice to the ECJ on the route to take when reaching their final judgment, which the ECJ may or may not follow. Secondly, the last definitive appellate court ruling in the UK is that of the EAT. The Court of Appeal were not sure about the issue and referred it to the ECJ and to date the AG has only provided an opinion. For the meantime the focus will undoubtedly be on the meaning of ‘an establishment’, and if redundancies are being proposed at a number of different establishments within an organisation where the total reaches 20, then legal advice should be sought.

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