Brussels, 06/02/2015 (Agence Europe) - EU rules on collective redundancies require companies to hold prior collective consultations if the number of at least 20 people are made redundant over a period of 90 days from one of the company's establishments. In Case C-449/13 in the past, the European Court of Justice ruled on what 'establishment' means, but a new case (C-182/13) currently before the court requires further clarification, clarification that was suggested on Thursday 5 February by Advocate General Nils Wahl.
Women's clothing company Bonmarché had 394 shops in the United Kingdom. Following cash-flow problems, a number of shops were closed in the Northern Ireland region section of the company, which had 20 shops employing a total of 180 people. No collective consultations were held. Four employees were made redundant in four shops in different towns, each of which employed at least 20 people. The four took their case to a court in the UK claiming a breach of the redundancy rules because the threshold of 20 redundancies should be considered in terms of the whole of the employer's company.
In his conclusions, Wahl said that the definition of 'establishment' as laid down by the Court of Justice in a previous ruling was 'a unit in which the workers affected by redundancy are assigned to carry out their work,” in other words the local employment unit. Wahl has not commented on the case in question, preferring to leave it to the national court, but gave a number of indications of how to proceed.
He says this definition by the Court of Justice does not grant importance to the way the employing entity is structured internally. Changing this definition on the grounds that an employer has a number of local employment units employing fewer than 20 members of staff would risk extending protection to all workers made redundant during a restructuring, independently of the structure in which they are working.
For example, for a group of companies, the EU rules on collective redundancies only apply to subsidiaries as the employer, even if it is the parent company that made the decision. However, if an employer has a number of shops in a shopping centre, all the shops can be viewed as a single local unit if a) the unit in question has a certain degree of permanence and stability; b) has one or more defined tasks; and c) if the workers have the technical means and an organisational structure that enables them to carry out these tasks. The unit does not necessarily have to have legal, economic, financial, administrative or technological autonomy. (JK)