John Hannett - Usdaw General Secretary says: ‘We are pleased that this case is going to be heard sooner rather than later because we had feared that it wouldn’t be concluded until autumn next year. This will mark the end of a six-year legal wrangle about workers who were unfairly ruled out of an award for not being properly consulted on their redundancy, simply because of the size of store they work in.
‘Our case is morally and logically robust. It makes no sense that workers in stores of less than 20 employees were denied compensation, whereas their colleagues in larger stores did qualify for the award. These were mass redundancy situations where thousands of workers lost their jobs. How can anyone suggest that the redundancies should be treated on a store-by-store basis when the whole company was closing down?
‘Having won this case at an Employment Appeal Tribunal, we were stunned when the Government appealed the decision, because they had failed to attend the hearing. We hope that the CJEU will ensure that justice can be done by former Woolworths and Ethel Austin workers.’
The Woolworths / Ethel Austin case will be heard by the Court of Justice of the European Union, in Luxembourg, at 2.30pm, on 20 November and will be in a conflated hearing with the Lyttle case from Northern Ireland and Rabal case from Spain.
In January 2012 Usdaw won compensation worth tens of millions of pounds for 25,000 former employees of both companies, but around 1,200 former employees of Ethel Austin and 3,200 former employees of Woolworths were denied compensation because they worked in stores with fewer than 20 staff.
The decision to deny compensation to staff who worked in smaller shops was based on the interpretation of UK law and it was greeted with outrage by former employees, customers, politicians and sections of the media. Usdaw fought the clear injustice of this decision.
Against this background, in May 2013 Usdaw won a landmark legal case at the Employment Appeal Tribunal (EAT) that should have seen those excluded staff back into the compensation scheme. This ruling not only meant that those excluded staff at Woolworths and Ethel Austin would have been entitled to the compensation received by employees from bigger stores, but that the law would be changed permanently in the same circumstances for all future workers from small stores.
Despite the Government’s failure to attend the EAT hearing they sought leave to appeal the decision, which was granted on 10 September 2013. The Government apologised to the EAT for their non-attendance at the original hearing and the Government were ordered to pay Usdaw’s full costs for the forthcoming appeal. The Court of Appeal decided on 21 January 2014 to refer the matter straight to the Court of Justice of the European Union.
Notes for Editors:
An employer proposing to make collective redundancies is required to consult in advance with representatives of the affected employees and the consultation must be completed before any notices of dismissal are issued. A complaint of failure to consult may be made to an employment tribunal and if upheld, the tribunal can make a Protective Award. Before this ruling the interpretation of UK law was that the obligation to consult was limited to situations where 20 or more employees are to be made redundant at one establishment within a 90-day period. In the Ethel Austin and Woolworths cases, each store or workplace was regarded as a separate 'establishment'.
Between 10 February 2010 and 11 April 2010, administrators MCR closed Ethel Austin's Head Office and Distribution Centre in Knowsley and 186 stores located throughout the country. In November 2011, Usdaw won a Protective Award for its members after an Employment Tribunal found that MCR had failed in its statutory duty to consult with Usdaw before making the redundancies. The Tribunal limited the award, which was worth eight weeks pay, to workplaces where 20 or more redundancies were made. As a result, only staff who worked at the company's Head Office and Distribution Centre and one store in Edgware, London actually received the award.
Woolworths went into administration on 27 November 2008 and by early January 2009 the administrators Deloitte had closed all of Woolworths stores, offices and distribution centres and made nearly 30,000 people redundant. In January 2012, Usdaw won a Protective Award for over 24,000 former employees of Woolworths after an Employment Tribunal found that Deloitte had failed in its statutory duty to consult with Usdaw before making the redundancies. Once again the award, worth eight weeks pay, was limited to workplaces where 20 or more redundancies were made. As a result, around 3,200 employees who worked in 180 of Woolworths 814 stores were denied compensation.
Usdaw successfully appealed the decision of both Employment Tribunals to limit the awards to workplaces where 20 or more redundancies were made and the two cases were subsequently combined as they concern the same point of law. BIS did not attend or give evidence to the appeal, even though they were named as correspondents along with the administrators. Only after the appeal ruling was announced did BIS engage and they decided to appeal the appeal ruling. The transcript of proceedings, judgment and directions hearing can be found at: bit.ly/1eICOgd
The Court of Appeal immediately referred the case to the Court of Justice of the European Union in Luxembourg. It has been set for 2.30pm on 20 November and will be in a conflated hearing with the Lyttle case from Northern Ireland and Rabal case from Spain.
Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fourth biggest and the fastest growing trade union with 430,000 members. Membership has increased by more than 17% in the last five years and by nearly a third in the last decade. Most Usdaw members work in the retail sector, but the Union also has many members in transport, distribution, food manufacturing, chemicals and other trades.
For Usdaw press releases visit: www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion