Woolies and Ethel Austin workers Court of Appeal hearing timetabled

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Shopworkers trade union leader John Hannett has welcomed the timetabling of a Court of Appeal hearing in which the Government is trying to stop former employees of Woolworth’s and Ethel Austin from receiving justice. It will be on 21 or 22 January 2014.

John Hannett – Usdaw General Secretary says: “We remain disappointed that the Government is going to great lengths to deny these low-paid workers justice and a modest compensation payment for not being properly consulted on their redundancy.

“The Government should be encouraging administrators to focus on keeping businesses open, not supporting their failure to properly consult with workers, as required under the law.

“The Government’s failure to attend the original Employment Appeal Tribunal, for which they have rightly apologised, and the lodging of this appeal means that not only is the payment of compensation further delayed, but the taxpayer will have to pick up the bill.”

“The fact that Court of Appeal hearings can be televised may enable taxpayers to see the full embarrassment of the Government and how their money is being thrown at this sorry cause.”

Background

In January 2012 Usdaw won compensation worth tens of millions of pounds for 25,000 former employees of both companies, but around 1,200 former employees of Ethel Austin and 3,200 former employees of Woolworths were denied compensation because they worked in stores with fewer than 20 staff.

The decision to deny compensation to staff who worked in smaller shops was based on the interpretation of UK law, and it was greeted with outrage by former employees, customers, politicians and sections of the media. Usdaw fought the clear injustice of this decision.

Against this background, in May 2013 Usdaw won a landmark legal case at the Employment Appeal Tribunal (EAT) that should have seen those excluded staff back into the compensation scheme. This ruling not only meant that those excluded staff at Woolworths and Ethel Austin would have been entitled to the compensation received by employees from bigger stores, but that the law would be changed permanently in the same circumstances for all future workers from small stores.

Despite the Government’s failure to attend the EAT hearing they sought leave to appeal the decision, which was granted on 10 September 2013. The Government apologised to the EAT for their non-attendance at the original hearing and the Government were ordered to pay Usdaw’s full costs for the forthcoming appeal.

History

An employer proposing to make collective redundancies is required to consult in advance with representatives of the affected employees and the consultation must be completed before any notices of dismissal are issued. A complaint of failure to consult may be made to an employment tribunal and if upheld, the tribunal can make a Protective Award. Before this ruling the interpretation of UK law was that the obligation to consult was limited to situations where 20 or more employees are to be made redundant at one establishment within a 90-day period. In the Ethel Austin and Woolworths cases, each store or workplace was regarded as a separate ‘establishment’.

Between 10 February 2010 and 11 April 2010, administrators MCR closed Ethel Austin’s Head Office and Distribution Centre in Knowsley and 186 stores located throughout the country. In November 2011, Usdaw won a Protective Award for its members after an Employment Tribunal found that MCR had failed in its statutory duty to consult with Usdaw before making the redundancies. The Tribunal limited the award, which was worth eight weeks pay, to workplaces where 20 or more redundancies were made. As a result, only staff who worked at the company’s Head Office and Distribution Centre and one store in Edgware, London actually received the award.

Woolworths went into administration on 27 November 2008 and by early January 2009 the administrators Deloitte had closed all of Woolworths stores, offices and distribution centres and made nearly 30,000 people redundant. In January 2012, Usdaw won a Protective Award for over 24,000 former employees of Woolworths after an Employment Tribunal found that Deloitte had failed in its statutory duty to consult with Usdaw before making the redundancies. Once again the award, worth eight weeks pay, was limited to workplaces where 20 or more redundancies were made. As a result, around 3,200 employees who worked in 180 of Woolworths 814 stores were denied compensation.

Usdaw successfully appealed the decision of both Employment Tribunals to limit the awards to workplaces where 20 or more redundancies were made and the two cases were subsequently combined as they concern the same point of law. BIS did not attend or give evidence to the appeal, even though they were named as correspondents along with the administrators. Only after the appeal ruling was announced did BIS engage and they decided to appeal the appeal ruling. The transcript of proceedings, judgment and directions hearing can be found at: bit.ly/1eICOgd

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