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Establishment Means Entity or Local Unit to which Worker is Assigned

Following our blog of 16 February 2015, the European Court of Justice (the “ECJ”) has agreed with the Advocate General about what is actually meant by “establishment” when dealing with redundancies and collective consultation, confirming it means the “entity” or “local unit” to which a worker is assigned.

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The ECJ’s decision means that there is no need for employers is to aggregate the number of proposed dismissals across all of its entities or units when determining whether the threshold for collective consultation is met. However, it will not always be obvious what will be the “unit to which the workers are assigned to carry out their duties” in each case. The Advocate General gave the view that it would not be inconceivable for a number of stores operating within the same shopping unit to be regarded as forming a single local employment unit. The ECJ did not comment on this example in its judgment.

We would recommend that if employers with employees at more than one work location are contemplating making 20 or more redundancies within a 90 day period that advice is sought in particular on what the “entities” are likely to be in each case.

For further information and for advice relating to redundancy and other employment law issues, please contact me (T: 01952 211 025; E: jennifer.gibson@lblaw.co.uk) or Will Morse (T: 01432 377152; E: will.morse@lblaw.co.uk).