Employment Law E-Bulletin Issue 39

Woolworths and Ethel Austin cases [2015] ECJ Case C-80/14 – What does the term ‘establishment’ mean in connection with collective redundancies?

The law obliges employers to inform and consult with employee representatives where there is a proposal to dismiss 20 or more employees as redundant within 90 days at one ‘establishment’.

But what is an ‘establishment’? Does it mean one store or site (where it may be unlikely that there would be 20 or more staff employed), the business as a whole or some other definition?

Dozens of Woolworths and Ethel Austin stores across the UK closed after the companies went into administration, resulting in the dismissals of thousands of employees on the grounds of redundancy. However, the employers claimed each store was an ‘establishment’ thus avoiding the need to collectively consult. It was argued by a trade union that former employees were entitled to compensation for failure to inform and consult. The EAT agreed, finding that ‘establishment’ was the business as a whole. The matter was referred to the European Court of Justice (ECJ) by the Court of Appeal.

The ECJ has held that an ‘establishment’ means the local unit or entity to which the redundant workers are assigned to carry out their duties. The ECJ did not conclusively say that each individual store should be considered as a separate establishment, but it clearly suggested that this approach would be permissible under the UK legislation.

The case will now revert to the Court of Appeal to determine whether, on the facts, each branch of Woolworths and Ethel Austin was a separate establishment.

This decision should be welcome news for employers as, in theory, in the future, the 20-person trigger point may be instigated in fewer cases and the consultation time therefore reduced i.e. because the term ‘establishment’ can be applied to smaller entities rather than a whole company. However, it is important to note that the unit to which workers are assigned to carry out their duties may not always be obvious and will be a question of fact to be determined according to the facts of each case.

Edwards v Encirc Ltd [2015] UKEAT/0367/14/DM – Is attending meetings at the workplace, in the capacity of a trade union or health and safety representative, working time for the purposes of the Working Time Regulations?

The Working Time Regulations (WTR) 1998 state that an adult worker is entitled to a rest period of not less than 11 consecutive hours in each 24-hour period.

In this case, two employees worked for their employer on twelve hour shifts. In addition to their normal roles, one employee was also an employee health and safety representative and the other a trade union representative. The first employee attended a meeting for health and safety representatives which finished late in the afternoon and which left him with a 6 hour break before the start of his night shift. The second employee attended a trade union meeting which, again, finished late in the afternoon and which left this employee with a break of 9 hours before the start of his night shift.

The Employment Appeal Tribunal (EAT) had to decide whether the meetings were “working time” for the purposes of the WTR 1998. This question was important because the employees argued that they should have their 11 hour daily rest break between the end of the meetings and the start of their next shift.

The EAT held that the meetings were “working time” as they satisfied the three elements within the definition; (1) the worker must be working, (2) the worker must be at the employer’s disposal and (3) the worker must be carrying out their activities or duties. The EAT took a broad approach to conditions 2 and 3 and stated that if an employer required an employee to be in a specific place and to hold themselves out as ready to work for an employer’s benefit (which would include attending a health and safety or trade union meeting) then these conditions would be satisfied.

The EAT therefore re-submitted the claim to a new tribunal for them to decide the case on the basis of this broader approach to the definition of “working time”.

Employers should be aware that these kinds of meetings will likely constitute “working time”. You need to therefore consider employees rotas carefully to ensure the WTR 1998 are complied with.

Conservative Government – Manifesto pledges on employment issues and budget news

Now that we have experienced a couple of months of a Conservative majority government, it is important to consider what changes might be in store from an employment perspective during this Parliament.

Here are some of the party’s original campaign pledges:

  • to eradicate exclusivity in zero hours contracts;
  • to support the national minimum wage and see real-term increases in the next Parliament;
  • to support the Living Wage and to encourage businesses to pay it, if they can afford it;
  • to increase the entitlement to free childcare to 30 hours for all three and four year olds of working parents;
  • to limit public sector enhanced redundancy payments;
  • to aim to prevent "disruptive and undemocratic strike action" by introducing a variety of new measures;
  • to create an extra three million apprenticeships over the next five years;
  • to aim to halve the disability employment gap by transforming policy, practice and public attitudes to get hundreds of thousands of disabled people into employment;
  • to promote full gender equality by requiring companies with more than 250 employees to publish the difference between the average pay of their male and female employees;
  • to take steps to eradicate the exploitation of migrant workers; &
  • to make volunteering for three days a year a workplace entitlement for people working in large companies and the public sector.

The ban on exclusivity clauses is already in place, having come into force on 26 May, and we now know from the budget on 8 July that they will be introducing a new National Living Wage. They have also confirmed that they will be consulting on the simplification of the tax and NICs treatment of termination payments.

For any further information on this or any other Employment matter, please contact Keith Land on 0191 226 4892 or keith.land@sintons.co.uk

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