In our March update, we looked at the Opinion of the Advocate General ("AG") of the Court of Justice of the European Union ("CJEU") on the meaning of "establishment" for collective redundancy purposes in the context of an appeal of a UK decision involving the UK high street chain, Woolworths. The CJEU has recently confirmed the AG's approach in Woolworths, in a decision which has been welcomed by employers. Below, we consider the implications of this decision for Irish employers.
We also provide an update on the industrial relations reforms discussed in our May update.
Collective Redundancies: CJEU Clarifies the Meaning of "Establishment"
In the Woolworths case, thousands of redundancies were made across various Woolworths' stores in the UK. However, as most of the stores had fewer than 20 employees, Woolworths did not engage in any collective consultation process with the employees. This is because under UK law, there must be at least 20 redundancies within a single "establishment" to trigger the UK collective redundancy legislation. The employees' trade union argued that the entire Woolworths organisation should be considered an "establishment" for the purposes of the legislation. In this case, the total number of dismissals in the establishment would far exceed 20 and would trigger the requirement for collective consultation. This interpretation was rejected by AG Bot, who recommended that for the purposes of determining when collective redundancy consultation obligations are triggered under EU law, "establishment" means the "local employment unit" in which the potentially redundant employees are assigned to carry out their duties and not the organisation as a whole.
The CJEU confirmed AG Bot's approach and referred to its decision in Athinaïki Chartopoiïa (C-270/05), in which it held that an entity need not have any legal, economic, financial, administrative or technological autonomy, in order to be regarded as an "establishment" for the purposes of the Collective Redundancies Directive. The CJEU concluded that "according to the case-law of the Court, 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' for the purposes of [the Directive]."
What does this mean for Irish employers?
Under Irish law, a collective redundancy will not arise unless during any period of 30 consecutive days, the numbers of...