Brussels, 30/04/2015 (Agence Europe) - EU rules on collective redundancies require companies to begin collective consultations if the number of redundancies is at least 20 over a period of 90 days in an “establishment” of the company. For companies which have a number of establishments, redundancies should be considered in each individual establishment, the Court of Justice of the EU concluded in its ruling on case C-80/14, delivered on Thursday 30 April.
The Court has been called on recently to consider several cases in which national courts seek clarification of what is meant by “establishment”, which features in the directive on collective redundancies (98/59/EC).
Whether in the case relating to redundancies from the ladies' wear company Bonmarché (see EUROPE 11248) on in this latest case, with the redundancy plans of high street retailers Woolworths and Ethel Austin, the question that comes up every time is the same: when the directive speaks of “at least 20”, does this refer to the number of redundancies in all of an employer's establishments in which redundancies are announced within a 90-day period or the number of redundancies announced in each of the establishments?
The Court has finally provided an unequivocal ruling. Firstly, the Court decided that an autonomous and uniform definition - not given in the directive - must be given of the concept of “establishment”. They determined that it should be defined as the entity to which the workers made redundant are assigned to carry out their duties, as the Court had proposed in a previous judgment. From there, it determined that, for there to be a collective redundancy, account had to be taken of the dismissals in each establishment considered separately.
Such a restrictive definition of the term is justified, the Court says, by the fact that the aim of the directive is to provide a comparable level of protection of the rights of workers in all member states and to harmonise the costs which such protective rules entail for EU undertakings. It must also be borne in mind that a wide interpretation could give rise to a situation where the redundancy of a single worker - possibly in an establishment located in a town separate and distant from the other establishments of the same undertaking - could be considered a collective redundancy, which would be contrary to the ordinary meaning of the term, the Court notes. It states, however, that member states are not precluded from passing rules that are more favourable to workers than those contained within the directive. (Jan Kordys)