Most employers would be aware that there are specific rules when it comes to collective redundancy. In essence, if an employer is making a high enough number of employees redundant in an establishment then employees are afforded certain protections and consultation rights. A major dispute took place in the UK as to what constituted an “establishment” and whether or not this meant one particular site, or indeed every site within that business. This matter has received some clarification from Europe an employers, especially those with multiple sites, should certainly ensure they are mindful of these developments. What is a Collective Redundancy? In Ireland, a Collective Redundancy is one where:
- at least 5 persons are being made redundant from an establishment which normally employs between 21 - 49 employees;
- at least 10 persons are being made redundant from an establishment which normally employs 50 - 99 employees;
- at least 10% of persons are being made redundant from an establishment which normally employs between 100 - 299 employees;
- at least 30 persons are being made redundant from an establishment which normally employs 300 or more employees.
What are the Additional Obligations in Respect of Collective Redundancies? In short, an employer in Ireland is required to engage in at least 30 days of consultation with affected employees and their representatives. An employer’s failure to meet this obligation is actually a criminal offence and carries with it a maximum fine of €250,000. In a collective redundancy scenario, employees have also the right to elect representatives to speak on their behalf and an employer must also notify the Minister of Jobs, Enterprise and Innovation of the possible redundancies at least 30 days before the first redundancy takes effect. Why is this Such a Big Issue? The reason this is such a big issue is because in the UK it was determined that “an establishment” meant all sites within a particular group. In the UK, for example, Woolworths were making employees redundant and the question was whether or not an “establishment” meant one Woolworths store or every Woolworths store. The UK courts held it was the former and that one must factor in all stores. In the UK this would significantly benefit the employee and be very onerous on the employer due to the way collective redundancies work in that jurisdiction. Conversely, it would have the opposite effect in Ireland in that it would be more onerous on employees and less so on employers. For example, in Ireland if one store had between 21 and 49 employees and was making 5 redundant then that would be a collective redundancy (see bullet point one above) if you just looked at that one store. However, if you had to factor in all stores which, for example, meant 300 employees nationwide then making 5 redundant in one store would not be a collective redundancy scenario (see bullet point four above). Thus, employers in Ireland could avoid collective redundancy requirements if “an establishment” meant all sites and not just one. The European View The UK case has ultimately been appealed to the Court of Justice of the European Union (CJEU) and one Advocate General has expressed his view (Case C‑182/13) that an “establishment… denotes the unit to which the workers made redundant are assigned to carry out their duties”. Thus, the Advocate General disagreed with the UK Courts and took the view that you only need to look at the one site where the employees are actually employed, and not all sites across the group. This is bad news for employees in the UK, but good news for employees in Ireland. Ultimately this view of the Advocate General is not binding on the EU Member States but such views are normally followed. If the matter proceeds to a full sitting of the CJEU then any decision is likely to be the same as the Advocate General’s opinion and that decision will be binding. What this Means for Irish Employers Whilst advice should be sought on every scenario, the above essentially means that Irish employers need to focus on individual sites when it comes to determining if a collective redundancy process is required. Employers are encouraged to seek advice from our 24 Hour Advice Service on 01 855 50 50 if they have any potential redundancy scenarios arising.
