Collective Redundancy Consultation - Establishment

19 May 2015

Is a single retail store capable of being an 'establishment' for collective redundancy consultation purposes?

Yes, held the European Court of Justice (ECJ) in Lyttle v Bluebird, answering a reference from a Northern Ireland Industrial Tribunal, arising from the closure of some Bonmarché retail outlets across the UK in 2012.

With thanks to Daniel Barnett’s employment law bulletin for the following case summary.

More precisely, the ECJ held that for the purposes of Article 1 (1)(a) of the Directive on Collective Redundancies, which determines the triggers for collective consultation 'it is the entity to which the workers made redundant are assigned to carry out their duties that constitutes the 'establishment''.

This decision follows the Court's recent decision in the Woolworths and Ethel Austin cases, holding that the definition of 'establishment' was the entity to which workers are assigned to carry out their duties, so this may be the end of line for the 'establishment' question.

The Court also held that the meaning of 'establishment' was the same in Article 1 (1)(a)(i) and 1 (1)(a)(ii) of the Directive (providing consistency over the two broad methods for implementing the Directive), The Court noted that if collective consultation were triggered by the number of staff at risk across an undertaking, rather than individual establishments, it could result in employers incurring very different costs in informing and consulting staff, contrary to the EU's objective of providing comparable cost burdens across Member States, and result in individual employees at remote locations coming inappropriately within the scope of collective consultation (para. 44 & 45).