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The Woolworths case – practical impact on HR1 notification

Most employers will be aware of the recent decision in the case of USDAW v Ethel Austin Ltd (successors to Woolworths PLC) and another. In the Woolworths case the EAT took the view that UK law does not comply with the European Collective Redundancies Directive and that references to establishment for the purpose of collective redundancy consultation should be disregarded.

The impact of this decision is that wherever an employer is proposing to make 20 or more redundancies in a 90 day period (regardless of location) collective consultation duties are triggered. As previously reported in this blog, this decision is now the subject of an appeal by BIS to the Court of Appeal.

As readers will be aware, where employers are proposing to dismiss as redundant 20 or more employees within a 90-day period they are also obliged to notify the Secretary of State by filing a HR1 form. In light of the Woolworths decision, many employers have taken a cautious approach to their obligation to inform the Secretary of State and have submitted HR1 forms to BIS where redundancies were spread across different sites but there were less than 20 proposed redundancies at any one site. However, recent anecdotal reports have suggested that BIS has not accepted HR1s where less than 20 employees have been dismissed at any one site.

As keen readers will be aware, the wording of section 188 of The Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA), which sets out the employer’s duty to consult and the wording of section 193 of TULCRA, which sets out the requirement to inform the Secretary of State of proposed redundancies, both use the words “at one establishment”. The Woolworths case effectively deletes the words “at one establishment” from section 188 but does not appear to take a similar approach to the obligation to file a HR1 under section 193. BIS therefore appears to take the view that the Woolworths case does not apply to the obligation to inform the Secretary of State of any proposed redundancies of 20 or more employees if they are spread across more than one site.

Unfortunately, the fact that the Woolworths decision is the subject of an appeal offers no assistance to employers who are currently commencing redundancy exercises affecting 20 or more employees at multiple locations. Until such time as further guidance is issued, a cautious approach would be for employers to notify BIS in any event where redundancies reach 20 or more regardless of location.

 

 

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further