Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

456px-Court_of_Justice_of_the_European_Union_emblem.svgThousands of workers who lost their jobs when high street retailers Woolworths and Ethel Austin collapsed have lost their legal battle for compensation.

The European Court of Justice (“ECJ”) ruled on 30 April 2015 that the former employees of Woolworths and Ethel Austin will not receive further awards of compensation as the stores that they worked at could not be defined as an “establishment” under European legislation.

In situations where an employer is making less than 20 employees redundant then the employer does not have a duty to collectively consult with the employees (unless there is a collective agreement to this effect) but must take the appropriate steps to dismiss the employee fairly, otherwise they risk a claim being made against them for unfair dismissal.

Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less then special rules apply under the Trade Union and Labour Relations (Consolidation) Act 1992. Under these rules the employer must inform and consult with the appropriate representatives of any employees who may be affected by proposed redundancy dismissal or by measures taken in connection with those dismissals.

If the employer fails to inform or consult properly then the trade union or employee representative can bring a claim for compensation on behalf of the employees. This is known as a claim for a ‘protective award’ and the amount awarded can be up to 90 days’ pay.

In 2008 Ethel Austin and Woolworths went into administration, making thousands of workers redundant. Upon these workers being made redundant in 2008 the Union of Shop, Distributive and Allied Workers (“USDAW”) made a claim for protective award on behalf of its members against Ethel Austin Limited (“Ethel Austin”) and WW Realisation Limited (“Woolworths”).

Their claims succeeded at the two Employment Tribunals they were brought before and the Tribunals made an award of, respectively, 90 and 60 days’ protective pay to the dismissed workers (about 24,000 of them). However, the Tribunals excluded from their award those made redundant from establishments where fewer than 20 workers were dismissed (about 4,500 employees). USDAW appealed the Employment Tribunal’s judgment on this ground and were successful at the Employment Appeal Tribunal, having their appeal upheld.

The Secretary of State for Business, Innovation and Skills (“BIS”) was not represented at the EAT hearing and did not submit written representations. However, as the Government would be responsible for the cost of the protective awards (as the retail businesses were insolvent), they elected to appeal the decision of the Court of Appeal. The Court of Appeal then referred the case to the European Court of Justice for guidance on two broad issues: how the relevant European Directive should be construed and, in particular, the meaning of “establishment; and whether the the Directive has direct effect on BIS.

The European Court of Justice has now ruled as follows in the case of Union of Shop, Distributive and Allied Workers (USDAW) and B. Wilson v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and Secretary of State for Business, Innovation and Skills:

  • The term “establishment” us a term of EU law and cannot be defined by the laws of member states.  It must, on that basis, be interpreted in an autonomous and uniform manner in the EU legal order. The Court states that, where an undertaking comprises several entities, it is the entity to which the workers made redundant are assigned to carry out their duties that constitutes the ‘establishment
  • That individual stores of companies could be defined as separate “establishments”

The ruling of the European Court of Justice therefore means that the remaining claimants cannot receive protective awards as they worked in “establishments” where less than 20 employees worked.

Chris Hadrill, a specialist employment solicitor at Redmans, commented on the claim: “USDAW has described the latest result in the European Court of Justice as ‘heartbreaking’ but the ECJ has a delicate task in balancing the rights and obligations of employees, employers, and individual member state governments.”

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk. Redmans have offices in Richmond, Chiswick, Hammersmith, Fulham, Kingston, Wimbledon, Ealing, Kings Cross and Marylebone (meetings strictly by appointment only).

Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

Share →

Our awards

Request a callback

    Your first name (required)

    Your last name (required)

    Your email (required)

    Your telephone number (required)

    Brief details of your enquiry

    Testimonials

    4.80 Average

    320 Reviews

    Anonymous

    Efficient and quick service!

    Posted 2 days ago

    Karen B

    Quick response very helpful Issue raised dealt with very quickly

    Posted 5 days ago

    Carmen T

    Redmans give Great service and advice on reading contracts. They can explain all the solicitors jargon into words that you can understand. I received excellent service an I will use them again and again.

    Posted 1 week ago

    Anonymous

    Very grateful for Mel’s efforts in handling my case from start to finish which I would have found very stressful without it. She was very professional, friendly and we had a positive outcome. Highly recommend.

    Posted 4 weeks ago

    Nalin W

    Mel Chin was my Legal Executive when I engaged the services of Redmans Solicitors to help with a redundancy matter. She was incredibly approachable and professional from start to finish. Specially I have to mention regarding prompt reply to all my email queries, It was super quick. I would thoroughly recommend Mel Chin. Many Thanks

    Posted 1 month ago

    Anonymous

    I'd highly recommend Redmans Solicitors. Mel was very helpful and assisted me throughout my case.

    Posted 1 month ago

    Anonymous

    Sacha was very thorough and very helpful, with great advice on when to act and when to wait on my case.

    Posted 1 month ago

    Anonymous

    I have been very pleased with the support I got from Redmans Solicitors on my case with my employer. Caroline has always helped me to put things in perspective and showed me different scenarios ultimately to help me taking the right decision. She was very professional and always available when I needed, and at the same time also emphatic which I found also really important to establish a strong relationship. Will definitely recommend!

    Posted 1 month ago

    Anonymous

    Prompt and efficient response to my enquiries. Excellent negotiating skills with my employer which considerably improved the terms of my settlement agreement.

    Posted 1 month ago

    Anonymous

    Very quick and professional service , Rana was very helpful

    Posted 1 month ago

    James G

    Very professional, knowledgeable and kept me informed at every stage of my case. I would highly recommend Redmans.

    Posted 2 months ago

    Pravina P

    Chris was really good and help solve my issues with current company. I would recommend him to anyone.

    Posted 2 months ago

    Paul L

    Sacha was extremely helpful in my matter. I would not hesitate you use Sacha or Redmonds again. Everyone was very helpful.

    Posted 2 months ago

    Monique N

    I had Mel Chin helping me with a settlement and she was very professional and reliable throughout my case. Mel provided me with a good understanding of what was happening and gave suggestions on routes I could take. My case was resolved and closed promptly although the opposing side were very difficult to deal with. A very big thank you to Mel and Chris.

    Posted 2 months ago

    Jackie C

    My first ever experience needing the services of a solicitor; cannot speak highly enough of Mel and Chris’s personable, reassuring and straight to the point advice in dealing with my settlement agreement. They put me at ease during an extremely stressful time. I am equally as happy with the outcome, as l am their professional services.

    Posted 2 months ago

    ""

    Really happy with the service. All very efficient. Mel rattled through things very fast, however was great whenever I needed to stop and ask a question! Would definitely return to Redmans if I ever needed Legal advice.

    Posted 2 months ago

    Peter F

    Very helpful and clear advice, would highly recommend.

    Posted 2 months ago

    William A

    Second time I have had to use Redmans. They did not disappoint. They are fast , efficient and friendly. I have already recommended them to friends and colleagues. I hope I dont have to use them again but if I have to , they are the solicitors for me.

    Posted 2 months ago

    Fleeta C

    Great service with tantastic communications. The solicitor responsible is extremely knowledgeable and was responsible for bringing a timely and desired solution.

    Posted 2 months ago

    Veronica M

    Extremely helpful, starting from a request for advice at very short notice, to dedicating time for me to understand and review all documents thoroughly.

    Posted 2 months ago

    Sophie R

    Very efficient and professional service. Chris was very empathetic, knowledgeable and personable. Highly recommended.

    Posted 2 months ago