Monday 11 May 2015

A new Government – where to, employment law?

Whilst we await further announcements, our David Sorensen has reviewed the Conservative manifesto and other policy documents to work out the 6 steps most likely to be taken by the new Government in employment law:

1. Scrap the Human Rights Act and replace it with a British Bill of Rights – this will inevitably affect e.g. the way in which Employment Tribunals conduct themselves and the sort of arguments about privacy in email use/social media/misconduct cases in the unfair dismissal context.

2. Restrict strike laws further – bringing in a minimum turnout for industrial action of 40% of the workers entitled to vote within certain sectors (fire, transport, health and education), criminalisation of certain types of picketing, an extension in the length of a union’s required notice of industrial action from 7 to 14 days, a reduction in the ‘life span’ of industrial action ballots so as to require regular fresh ballots to be called, allowing employers to use agency workers to provide cover during a strike etc. All of these steps will inevitably make it even harder for unions to support workers who strike and increase the (already enormous) red tape unions face in these cases.

3. Restrict trade unions in other ways – increasing the regulation of union members’ subscriptions, reducing union representatives’ facility time in the workplace, reforming the Certification Officer’s role etc.

4. Keep ET fees – despite the evident unfairness (e.g. Vince Cable said just before the election “there is enough evidence to suggest that this was a very bad move and should be reversed. It is highly suggestive that the fees are discouraging people - particularly low paid women - from pursuing their rights”) it seems that, subject to any adverse Court of Appeal ruling in the ongoing Unison judicial review, ET fees may now be here to stay.

5. Pull out of the EU? The big question – if so, what happens to all the EU-sourced legislation such as the anti-discrimination laws, Equal Pay, TUPE, Collective redundancy consultation? Does it stay or also have to go?

6. There are some potentially positive measures (assuming they are implemented fairly and appropriately) – the ‘tackling’ of illegal working; the ‘encouragement’ of businesses to pay the ‘Living Wage’; a tax-free minimum wage by increasing a worker’s tax free personal allowance to £12,500; 3 days’ paid volunteers’ leave for employees in businesses with 250 employees or more or those employed throughout the public sector.

The direction of travel is clearly going to be anti-union and anti-industrial action. Access to justice for workers and employees is not going to be a priority. There are bound to be more employment law changes coming as well – will they revive the previous Adrian Beecroft report? That recommended cuts to maternity rights, a reduction in TUPE protection for transferring employees, increases to ET fees (e.g. from the currently high £1,200 to the extreme £3,750) as well as the removal of unfair dismissal protection and replacement with ‘No Fault Dismissal’. Time will tell.

David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.


Thursday 7 May 2015

Clarification of the term 'establishment' in connection with Collective Redundancies

On 30th April 2015 the Court of Justice of the European Union (CJEU) delivered their long-anticipated Judgment in the well-publicised ‘Woolworths [1]case.

This case concerns the obligation on employers to inform and consult when they propose to make mass redundancies. 

The circumstances are rather complex, but a brief summary of the facts follows:- 

In 2008, the well-known retail chain, Woolworths, entered administration after a lengthy period of difficult trading.  Shortly afterwards the clothing retailer, Ethel Austin, became a further casualty of the recession as they too appointed administrators. 

Their insolvencies ultimately resulted in the dismissal, on grounds of redundancy, of thousands of employees across hundreds of individual stores throughout the United Kingdom.

Employment Tribunal claims for Protective Awards were brought.  The claimants in those actions sought compensation for the failure of both companies to inform and consult their former workforce, prior to mass redundancies being made, in accordance with the statutory duty under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRA”).    

Section 188 of TULRA requires employers to consult with affected employees (either via a recognised Trade Union, elected employee representatives or with the individuals themselves) for a minimum period of (as is now the case) 30 days prior to the first dismissal taking place. 

However, this duty only arises if 20 or more individuals are employed at the same “establishment”, which, significantly, is not defined by TULRA. 

In ‘Woolworths’, the Tribunal was asked whether the duty to inform and consult under TULRA applied to separate shops that employed fewer than 20 people, even though more than 20 people were made redundant across the whole workforce by the closure of the business.  In other words, was it possible to aggregate shop workforces to satisfy the “20 redundancies” requirement? 

At first instance, around 450 former employees were refused a Protective Award, with the Tribunal determining that each individual store should be regarded as a separate “establishment” for the purposes of redundancy consultation. 

The Court of Appeal of England and Wales, which is currently hearing the case on appeal, previously asked the CJEU to clarify the meaning of “establishment” in order to assist the application of the law in the domestic courts.  Specifically, the CJEU was asked whether “establishment” could be interpreted so as to cover the whole of the business, or, alternatively, whether it should be afforded a more narrow interpretation and apply only to the particular unit in which the workers concerned were assigned to carry out their duties. 

Although the provisional opinion of Advocate General Wahl was provided some months ago, the latest Judgment confirms the CJEU’s position that the term, “establishment”, should be interpreted as the entity to which the workers made redundant were “assigned to carry out their duties”. 

In other words, the Court of Justice has, regrettably, applied a narrow interpretation.

The upshot is that thousands of people made redundant by the closure of Woolworths, Ethel Austin, and indeed other businesses who have entered administration, may not receive any compensation (depending upon whether the Court of Appeal’s pending Judgment is consistent with the CJEU’s – as seems overwhelmingly likely).   

We take the view that it is profoundly unfair that some individuals will likely find themselves unable to claim a Protective Award (which could equate to up to 90 days’ gross pay) simply because they worked at a smaller site, even though the whole of the business is affected by redundancy. 



[1] USDAW and another v WW Realisation 1 Ltd (in liquidation) and others (C-80/14)

David Sorensen - Partner
For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.