Woolworths Administration: protective awards should have been paid to all staff
In USDAW –v- Ethel Austin Limited (in administration) & another case, the EAT has given its long awaited decision regarding protective awards under TULRCA. This involved the cases of employees of the Woolworths and Ethel Austin Stores, the former of which went into administration in November 2008.
The wording of TULRCA means that the collective consultation obligation only applies where 20 or more employees “at one establishment” are to be dismissed as redundant. Accordingly, 3,233 employees who worked at Woolworths stores with fewer than 20 employees did not get protective awards. The USDAW union argued that TULRCA failed to implement the European Collective Redundancies Directive which provided a different test and meant that when calculating the number of employees being dismissed for redundancy, the employer should not just include employees at a particular location but should consider all employees in the business being made redundant within a 90 day period. The EAT upheld the appeal agreeing with USDAW’s submissions. This is a major change in employment law and strangely, given that in insolvency cases protective awards would normally be paid out of the NIF, the Secretary of State, despite being a Respondent in the proceedings, decided not to attend and make submissions.
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