Following recent developments at the European Court of Justice (ECJ) this week, the UK law on collective redundancies could potentially revert to the previous law that existed before 2013.
The previous law was much more sympathetic to an employer’s rights over those of its employees, and the possible law change has already caused anger among trade unions.
Nils Wahl, advocate-general of the ECJ, said that he disagreed with the decision made at an employment appeal tribunal two years ago, which essentially changed the law regarding collective redundancies.
If Mr Wahl’s advice is followed in the ECJ’s final judgment, which seems likely to be the case, the former pre-2013 law will once again be used in any collective redundancy case.
The specific case behind the dispute involves approximately 1,200 former employees of Woolworths and Ethel Austin – when the recession saw the large retailers collapse the employees lost their jobs.
The relevant law affecting collective redundancies has traditionally been interpreted to mean that employers only have a legal obligation to consult staff collectively when they plan 20 or more redundancies in a single establishment (this could include an office, shop or factory unit).
However, because employees of both Woolworths and Ethel Austin worked in separate shops with less than 20 staff (total numbers working for the companies were not considered), the administrators did not compensate them.
At the employment appeals tribunal in 2013 – the case that Nils Wahl has recently taken issue with – it was agreed with the Usdaw union, which presented the case on behalf of the Woolworths and Ethel Austin employees, that a company’s obligation to consult should apply when 20 or more redundancies are planned across a whole company and not separate retail or work units.
The 2013 decision and subsequent law change caused employers to complain about the complexities and expenses involved with restructuring their workforces.
The Usdaw union has expressed its disappointment at the advocate-general’s advice but is optimistically awaiting the final judgement.
John Hannett, Usdaw’s general secretary, said: “It makes no sense that workers in stores of less than 20 employees were denied compensation, whereas their colleagues in larger stores did qualify for the award.
“These were mass redundancy situations where one central decision was made to close the whole company down, with no individual analysis of the viability of each store on a case-by-case basis.”