Woolworths case referred to European Court of Justice

At our recent employment seminars, Square One Law associate, Eleanor Wilkinson, referred to the judgement of the Employment Appeals Tribunal (EAT) in USDAW v Ethel Austin Ltd (in administration) and another (the “Woolworths case”).

We would like to update you as a further development has occurred since then. The outcome of the case will have huge significance for employers operating across multiple sites and we shall continue to track its progress.

The EAT held previously that employees of the retail chains Woolworths and Ethel Austin who were at risk of being made redundant, were entitled to be consulted collectively under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) despite their number being less than 20 at each store.

The EAT concluded that the words “at one establishment” in section 188(1) of TULRCA were incompatible with the underlying EU Collective Redundancies Directive and held that these words should be disregarded for the purposes of any collective redundancy involving 20 or more employees.

Despite the Secretary of State for Business Innovation and Skills applying for the case to be stayed pending the outcome of the Northern Ireland Industrial Tribunal’s reference to the European Court of Justice (ECJ) in Lyttle and others v Bluebird UK Bidco 2 Ltd on the same issue, the Court of Appeal has now referred the Woolworths case to the ECJ.

The Court of Appeal decided to make its own reference to the ECJ rather than stay the appeal as it felt that it would be preferable for the ECJ to have the benefit of a legally represented party arguing the case for the employees, (the employees in Lyttle do not have legal representation) and the Lyttle reference would not necessarily resolve all of the issues in the Woolworths case.

It is reported that the wording of the questions to be referred is due to be agreed between the parties and an expedited hearing will be sought. The questions will reportedly cover two issues: the construction of the relevant provisions of the EU Collective Redundancies Directive (including the meaning of “establishment”) and whether the Directive has direct effect against the Secretary of State.

We believe the case will have huge significance for employers operating across multiple sites and it is hoped that the case will be expedited. We shall continue to keep you advised of the latest developments.

JP Van Zyl Partner, Square One Law