Retales™ - Compensation for ex-Woolworths staff - EAT grants leave to appeal
14 November 2012
As a number of retailers
continue to face administration, the retail sector faces fresh
challenges in relation to the failure to consult over collective
redundancies.
We reported back in
January that the shopworkers union Usdaw won compensation of up
to £67.8 million for over 24,000 former Woolworths employees made
redundant when the retailer collapsed in 2008. Usdaw succeeded at
Employment Tribunal in its claim that the administrators had failed
in their duty to consult collectively before making
redundancies.
Not all employees were awarded compensation. As the duty to consult
collectively about redundancies is triggered where an employer is
proposing to dismiss as redundant 20 or more employees at 'one
establishment' within a period of 90 days or less, Usdaw was
unsuccessful in its attempts to get protective awards for employees
employed at stores with less than 20 staff.
However, the Employment Appeal Tribunal (EAT) has now granted Usdaw leave to move to a
full hearing, on the basis that the union did have an arguable
case. The full hearing is likely to take place in spring
2013.
The Tribunal's decision in this case accorded with both case law
and the general approach taken by most retailers to the
'establishment' test. It remains to be seen how the EAT will tackle
Usdaw's appeal. If successful, it would have wide ranging practical
and financial implications, extending beyond the retail sector, and
would alter the way in which collective redundancy consultation is
undertaken.
We will be tracking this case closely and will provide further
updates on this case on our
Employment Law Blog. For further advice on collective
redundancy consultation or
any other retail employment issue, please contact
Nick Thorpe, Partner (Employment
and Pensions Group).