Strategy & Operations » Legal » Woolworths staff lose redundancy compensation battle in ECJ ruling

THOUSANDS of workers made redundant when high street retailers Woolworths and Ethel Austin collapsed will not receive compensation, following a European Court of Justice (ECJ) ruling that provides a welcome relief for British businesses.

The ECJ ruled in favour of the UK government in the controversial Woolworths redundancy case and supported the principle that stores with fewer than 20 employees are excluded from the requirement to consult over collective redundancies.

The case dates back to Woolworths collapse in 2008, and the collapse of Ethel Austin two years later when thousands of employees missed out on compensation because they were based in stores with fewer than 20 staff.

Trade union USDAW, acting for the affected staff, successfully brought claims in the Employment Tribunal for protective awards of up to 90 days’ pay per employee. The tribunal decided that UK legislation should be re-written in line with EU principles, so that the location where workers were based became irrelevant. As a result, employers had to collectively consult whenever there were 20 or more redundancies across their entire business.

The ECJ’s ruling, brought as an appeal by the UK government, paves the way for the Court of Appeal to reverse the decision of the tribunal.

Christopher Tutton, employment partner at Irwin Mitchell said the decision “will certainly provide relief for businesses, particularly those with multiple sites, and greater certainty on an already complex area of law”.