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£67.8 million for ex-Woolworths staff - more to come?

Nick Thorpe
25/01/2012
So after the tabloid headlines of ex-Woolworths staff being awarded £67.8 million, we have now had the opportunity to pick over the judgment.The case concerns the collapse of Woolworths in 2008 and a So after the tabloid headlines of ex-Woolworths staff being awarded £67.8 million, we have now had the opportunity to pick over the judgment.

The case concerns the collapse of Woolworths in 2008 and a claim by the shopworkers union, USDAW, that the administrators failed to undertake collective consultation before making redundancies. USDAW was successful in its claim and the ex-Woolworths staff are now in line for protective awards of 60 days' pay.

However, not all employees will receive compensation, as those employed at stores with less than 20 employees will not be entitled to protective awards. Under UK legislation, the duty to consult collectively about redundancies is only 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.

As suspected, USDAW failed to persuade the Tribunal to treat all of the Woolworths stores and other sites operated by Woolworths as one establishment rather than separate establishments. But Counsel for USDAW did raise some interesting arguments about the proper interpretation of the European Directive from which the right to collective consultation is derived. Counsel argued that, given the wording of the Directive, protection should be provided where the number of redundancies contemplated overall, over a period of 90 days, is at least 20, and not merely where the number of redundancies being contemplated at a given establishment exceeds that threshold.

If successful, this argument would have a significant impact on the current understanding regarding the collective consultation and potentially wide implications for all employers. The Tribunal refused to refer the matter to the ECJ based on comments previously made by the EAT in another case. But USDAW may have better luck in the EAT so this is certainly a case to watch.

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