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Employers Warned To Take Stock Of Landmark Redundancy Ruling

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Pearson is advising businesses to keep a landmark redundancy ruling on their radar ahead of a decision by the European Court next month.

The ruling, which applies to retailers Ethel Austin and Woolworths, is even more pertinent given the recent demise of high street giants such as Tesco and Sainsbury’s, and also of Bury-based retailer, Bank.

The case applies to redundancy cases where a company employs staff across multiple sites. On 5 February a decision will be made on an appeal case brought by the shop workers’ union, USDAW against Ethel Austin.

Susan Mayall, head of employment, commented: “The case relates to employers’ obligations to hold collective redundancy consultations when 20 or more redundancies are proposed within a 90-day period.

“The question is whether this obligation still applies if a group of 20 or more employees work at various locations for the same employer – as was the case for Ethel Austin and Woolworths in this action. The outcome will determine what level of protection employees can expect if they are made redundant in the future.”

Susan continued: “Tesco has just announced plans to close 43 of its least profitable stores, more than half of which are ‘Tesco Express’ stores, which have a smaller staff but remain part of a very large organisation.

“The outcome of the European Court decision will have a direct impact on situations like this, determining whether employers will be obliged to group stores or sites together when making redundancies and offer a collective redundancy consultation.”

Where the collective redundancy obligation does apply, failure to consult effectively can expose the employer to a claim for a protective award, which is worth up to 90 days’ pay per employee if awarded.

“The decision will clarify an important element of employment law”, Susan added. “I will be keeping a close eye on the outcome and would advise employers to do the same.”

For Employment advice contact Susan Mayall on 0161 785 3500 or email susan.mayall@pearsonlegal.co.uk

 

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

This blog was posted some time ago and its contents may now be out of date. For the latest legal position relating to these issues, get in touch with the author - or make an enquiry now.

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