Collective redundancy is a highly contentious issue and we recommend that bespoke legal advice is sought if your business is experiencing a potential redundancy situation.

Firstly, an employer who is proposing to dismiss as redundant 20 or more employees at “one establishment” within a period of 90 days or less must meet the following legal requirements:

• Complete and submit Form HR1 which can be found on the Department for the Economy’s (“DfE”) website. Late notification or failure to notify, is a criminal offence and the employer may be liable to a fine; and
• Consult with employee representatives. These may be trade union representatives and/or elected employee representatives for those employees not represented by a union. In the event that no representatives are elected, the employer must consult with the affected employees on a group and individual basis.

In the above scenario where more than 20 redundancies are being proposed across various business locations, it can be difficult to determine whether each location is a separate establishment or whether the locations can be aggregated to form “one establishment”.

However, the ECJ ruling in Usdaw and another v Ethel Austin Ltd (in administration) and others (C80-14) (the “Woolworths case”) brought eagerly anticipated clarity for employers in this regard. The ECJ held that “establishment” means the entity to which workers are assigned to carry out their duties. On this basis, the collective consultation obligations under Article 216 of the Employment Rights (Northern Ireland) Order 1996 would likely only be triggered if 20 or more employees at one particular business location were facing redundancy.

The Woolworths case was affirmed in the NI case Lyttle and others v Bluebird UK Bidco 2Ltd (C392/13), where the ECJ held that each of a retailer’s stores was capable of constituting an ‘establishment’ for redundancy consultation purposes.

The above ECJ decisions provide practical benefits for employers as collective consultation obligations will likely only be triggered if there are 20 or more redundancies at one particular site. However, in light of potential penalties that an employer may face for (a) failing to notify the Secretary of State and/or (b) failing to consult where the duty arises, we recommend that employers seek specific legal advice if a potential redundancy situation has arisen, particularly if various sites may be affected.