Nicola Kerr, Employment partner, comments on the European Court’s ruling on one of the most significant employment cases of the past several years.

The case relates to when employers have to conduct formal collective consultation with staff in a redundancy situation.  UK legislation clearly states that unless 20 or more employees face redundancy at the same site, there is no requirement to collectively consult.  A shock Employment Appeal Decision in 2013 ruled that this was wrong under European law, and that employers needed to count all their UK employees facing redundancy in considering whether the 20-or-more threshold was reached, regardless of whether those employees were based at one site or several.  But today’s European Court ruling disagrees on this point.

Nicola Kerr, Partner at international law firm King & Wood Mallesons, said:“This is great news for employers, as we anticipated. Basically it means consultation will be required in fewer cases.  Employers will generally be obliged to count only those redundancies occurring in each local establishment in deciding whether the magic number of 20 – which triggers collective consultation – is reached.  Only in relatively rare cases will it be necessary to aggregate more than one workplace as comprising a single establishment.

Fewer collective consultation exercises and fewer burdens on employers will cut the time and cost of dealing with redundancies.  Today’s decision has particularly cut red tape for multi-site employers such as retailers who might otherwise be faced with many more collective consultation exercises, across widespread sites and for diverse reasons. Employers can take heart from this opinion from the European Court.  However, we must now await the findings of the Court of Appeal as to precisely how this ruling will be interpreted in the UK.”