If a business is proposing to make 20 or more redundancies in one establishment, then the procedure that needs to be followed is more onerous, takes at least 30 days and brings with it the potential for an expensive punitive award for failure to comply.

For the last couple of years, following the Employment Appeal Tribunal judgments in the cases concerning collapsed retailers, Woolworths and Ethel Austin, there has been a fear that UK law was in breach of EU law by only looking at redundancies "in one establishment", i.e. each individual location and that it was necessary to count redundancies across the wider businesses and multi-sites. This caused problems for businesses with multiple sites, as the obligation to consult could be triggered by, for example, ten redundancies across sites in London, seven in Leeds, two in Bristol and one in Cambridge and many businesses experienced a difficulty in monitoring this situation and ascertaining when the threshold had been reached. This increased the complexity, cost and risk of handling redundancies for many businesses.

The European Court of Justice has now confirmed that the trigger for collective redundancy consultation can be the proposal to dismiss for redundancy 20 or more employees in one establishment, e.g. a single location and not the wider business and this is therefore a welcome decision for multi-site businesses.

The case has now been referred back to the Court of Appeal who will decide, on the facts, whether each branch of Woolworths and Ethel Austin was a separate establishment. An establishment is the place of work unit to which the employees are assigned and does not need to have its own management, financial or administrative autonomy, so it could well be an individual location.

This decision does not mean that each individual location will always be a separate establishment. That is a matter for the local courts to decide and will depend on the particular circumstances. For example, in the Advocate General's opinion, which was published prior to this judgment, "if an employer operates several stores in one shopping centre, it is not inconceivable that all of those stores should be regarded as forming a single local employment unit." HR teams should consider this question carefully in relation to each redundancy exercise and look closely at how the business and each individual unit operates. If staff regularly work between locations, and the two locations operate as part of one business unit, then you may have to count redundancies across both.

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