Consultation warning after Woolworths decision

A Lancashire employment law expert has warned that businesses looking to make even a small number of staff redundant must ensure they consult properly or face large payouts.

The warning comes after a landmark legal decision relating to former employees of Woolworths and Ethel Austin.

Last year a number of former employees were awarded a £70m pay-out after the administrators of the collapsed businesses failed to consult with staff correctly. However, only staff who worked at stores with 20 or more workers were entitled to the compensation.

The law says that there is only an obligation to consult when 20 or more staff are to be made redundant at one establishment.

The decision was appealed on the grounds that ‘establishment’ should mean the company as a whole rather than individual stores.

The appeal has now been upheld by the Employment Appeal Tribunal, meaning employees from Woolworths being entitled to up to eight weeks’ pay, and those at Ethel Austin 12 weeks’ pay.

Now Oliver McCann, partner in the employment team at Napthens solicitors in Blackburn, said: “This ruling means that if an employer intends to make 20 or more staff redundant, wherever they may be based in the UK, they must consider consultation properly or face paying out considerable compensation claims. “Consultations are a time-consuming and potentially costly process, and must be done properly. Any employers finding themselves in this situation should consult their advisors at the earliest opportunity.”