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EU guidance on redundancy provides boost for employers

Posted: 18th March 2015   In: Business Employment

Employers needing to lay off staff could be spared time and expense following new guidance about collective redundancies from one of Europe’s top law officials.

The law relating to collective redundancies applies when an employer wishes to lay off 20 or more workers within a 90-day period. In those circumstances, the employer has to consult with the affected employees or their representatives for at least 30 days before the redundancies can take place.

This period is extended to at least 45 days if more than 100 hundred people are involved.

Recent high profile cases, including one involving Woolworths and its liquidators, raised the issue of whether the collective redundancy requirement came into effect when 20 or more employees were being laid off across multiple sites, or at just one establishment.

The point was important because if it applied across multiple sites, employers could find themselves involved in protracted and costly negotiations, even though only a handful of people were involved at any one location.

Last year, the Employment Appeal Tribunal ruled that the regulations applied to redundancies across multiple sites. The case went to the Court of Appeal, which asked the Court of Justice of the European Union (CJEU) for guidance.

The advocate general of the CJEU has given a preliminary opinion stating that the collective redundancy rules should only apply if there were 20 or more people involved in one site, not across multiple sites.

That view still has to be ratified by the CJEU, but it usually follows the opinion of the advocate general.

The guidance, assuming it is upheld, will make life much easier for employers having to make staff redundant across different sites.

Katja Hall, the CBI deputy director-general, said: “This will provide a welcome boost to UK businesses by reducing the administrative burden that had forced them to undertake numerous redundancy consultations.

“We’re glad the government heeded our advice by appealing an incorrect judgment that has been needlessly harming British companies.”

The CJEU is expected to make a final decision later in the year. We shall keep clients informed of developments.

Please contact John Carter if you would like more information about the issues raised in this article of any aspect of employment law.