1 May 2015

Thousands of workers who lost their jobs when Woolworths collapsed have lost their compensation claim.

The ECJ ruled that the 3,200 Woolworths workers and 1,200 Ethel Austin employees who worked at stores employing less than 20 staff do not qualify for compensation, because under UK law, workers in smaller stores are excluded from an obligation to consult over redundancies.

The ECJ held that “establishment” in collective redundancy legislation, refers to an individual workplace, not to the employer as a whole.

Usdaw’s general secretary, John Hannett, said: “This decision marks the end of the road for our members from Woolworths and Ethel Austin seeking justice.

“Our case is morally and logically robust, so today’s verdict is a kick in the teeth. It is unfair and makes no sense that workers in stores of less than 20 employees were denied compensation, whereas their colleagues in larger stores did qualify for the award.

“These were mass redundancy situations where one central decision was made to close the whole company down, with no individual analysis of the viability of each store on a case-by-case basis.”

Chuka Umunna, the shadow business secretary, said: “It is grossly unfair that when these businesses went under, some employees got the lifeline of compensation on losing their jobs, whilst others did not.

“The fact that ministers were not only happy to watch this unfairness happen but at the European Court of Justice acted to stop the employees being compensated in this situation is scandalous and tells you all you need to know about their attitude to people’s rights at work. If elected on 7 May, it will be left to the next Labour government to change the law to address this.”

For more information read our blog piece by Michael Ford QC