Union officials: USDAW v.Woolworths could have immediate relevance to your recent cases. It’s well worth checking!

Pattinson & Brewer employment specialist Paul Statham believes that the very recently published, written USDAW v. Woolworths judgment should prompt trade union officials involved in similar cases in the last three months to look at them again…    

The Employment Appeal Tribunal has now published the transcript of the Proceedings in the important case of Usdaw v. Ethel Austin Limited (In Administration) and Usdaw v. WW Realisation 1 Limited and Others. (click the link to download).

On 31 May the Usdaw website carried a news item headed “Usdaw wins more than 5 million for ex-Woolies and Ethel Austin staff in landmark legal cases”. The difficulty was that at the time there was only a note of an oral judgment given by his Honour Judge McMullen at the end of the case. The written reasons have now been produced and they confirm the accuracy of the original report.

The case evolves out of the failure of the Administrator to consult the recognised trade union prior to making mass redundancies, after Ethel Austin and Woolworth stores were closed overnight when the administrators could not find a buyer.

There was little or no proper consultation with the recognised trade union, and Employment Tribunals awarded 90 days pay and 8 weeks pay respectively as a protective award for the failure of the Administrator to consult with the recognised union prior to the redundancies. However, employees in workplaces with less than 20 employees did not receive any compensation on the basis that Section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 excludes establishments with less than 20 employees.

The Employment Appeal Tribunal has now confirmed that Section 188(1) does not properly implement the UK’s obligations in Article 1(a) of the European Union Collective Redundancies Directive 98/59 EC of the 20 July 1998.

Section 188(1) says:

“where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals…appropriate representatives of…the employees”.

The EAT has held that Section 188 is incompatible with the Directive and that they are entitled to reinterpret the legislation leaving out the words ‘at one establishment’ in order to give effect to the words of the Directive.

This means that if an employer proposes to dismiss 20 employees as redundant in 90 days anywhere in the country, then they must first consult in accordance with Section 188. If there is a recognised trade union for the affected employees then they must consult with them. If there is none, they must first arrange for workplace representatives to be elected and then consult them about the redundancies.

There is a time limit for bringing claims, which is three months from the date of the last dismissal of an affected employee. Therefore if anyone has, in the last three months, been dismissed in circumstances where 20 employees have been made redundant by the business within 90 days anywhere in the country and no adequate consultation has taken place -either with the recognised trade union or elected workplace representative – then a claim for a protective award of up to 13 weeks pay for each affected employee can be brought by the union or workplace representatives.

Further, in any cases where 20 or more employees are having their terms and conditions of employment changed by means of a threat of dismissal and reinstatement on more detrimental terms, they may also be entitled to bring a claim as the definition of redundancy, for S.188 covers any mass dismissals or the threat of mass dismissals.

I suggest that any union officials that have been involved in such cases in the last three months check to see whether their members may fall within these principles.