Industrial Tribunals Northern Ireland Decisions

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URL: http://www.bailii.org/nie/cases/NIIT/2013/555_12IT.html
Cite as: [2013] NIIT 00555_12IT, [2013] NIIT 555_12IT

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THE INDUSTRIAL TRIBUNALS

CASE REFS: 555/12

1010/12

1016/12

1026/12

CLAIMANTS: 1. Valerie Lyttle

2. Sarah Louise Halliday

3. Clara Lyttle

4. Tanya McGerty

RESPONDENT: Bluebird UK Bidco 2 Limited

FIRST DECISION

In each of these four cases:

(A) We are satisfied that the protective award claim involves issues regarding the interpretation of EU Directive 98/59/EC.

(B) We have decided to refer questions on those issues to the Court of Justice of the European Union (pursuant to Article 267 of the Treaty on The Functioning of the European Union).

(D) The questions are set out at paragraph 104 of this Decision.

Constitution of Tribunal:

Chairman: Mr P Buggy

Members: Mrs E Gilmartin

Mr D Walls

Appearances:

The claimants were represented by Mr Philip Kilpatrick.

The respondent was represented by Mr T Warnock, Barrister-at-Law, instructed by DLA Piper UK LLP.

REASONS

1. Nineteen of the Northern Ireland Bonmarche employees who were made redundant during the spring of 2012 (including the four claimants in these cases) have brought cases in the Northern Ireland industrial tribunals. All of those cases are currently pending. All of those claimants are represented in those cases by Mr Philip Kilpatrick.

2. These four cases are “lead” cases. The outcomes of these cases will not necessarily be determinative of the outcomes of all of the other 15 cases. However, the expectation is that the outcomes of these four cases will be seen by all relevant parties as being a powerful indicator of the likely outcomes of the 15 other cases.

The facts

3. We made the following findings of fact.

4. The respondent to these proceedings (“Bluebird”) is the current owner of the “Bonmarche” business. Bonmarche operates many stores, which trade under the name “Bonmarche”, and which sell women’s clothing.

5. In January 2012, Bonmarche had 394 such stores, throughout the United Kingdom (“UK”) and the Isle of Man, and there were 4,000 employees employed in those stores.

6. For administrative purposes, Bonmarche regarded its single Isle of Man store, and all its Northern Ireland stores, as constituting one region (“the Northern Ireland Region”), within its overall UK business. In January 2012, throughout the Northern Ireland Region, there were 20 stores, in which 180 people were employed.

7. In the spring of 2012, the respondent carried out a redundancies process, or redundancies processes, throughout the United Kingdom and the Isle of Man.

8. As a result, Bonmarche is now left without any store or staff in the Isle of Man, and it is left with only 265 stores UK-wide, and only 2,900 employees throughout the United Kingdom.

9. Also as a result of that process, or those processes, the respondent is left with only 8 stores in Northern Ireland, which employ only 75 employees in Northern Ireland.

10. The process, or the processes, which culminated in those dismissals, did not begin prior to January 2012. All of the relevant redundancies took effect on 12 March 2012.

11. The claimant Valerie Lyttle was employed as branch manager at the Bonmarche shop in Lurgan, County Armagh. She was not contractually obliged to work at any other location and in practice she did not work at any other location. Fewer than 20 staff were employed at the Lurgan shop.

12. The claimant Ms Halliday was employed at the Bonmarche store in Banbridge, County Down. She was not contractually obliged to work at any other location. In practice, she did not work at any other location. Fewer than 20 staff were employed at the Banbridge shop.

13. The claimant Clara Lyttle worked as the store manager at the Bonmarche shop in Omagh, County Tyrone. She was not contractually obliged to work at any other location. In practice, she did not work at any other location. Fewer than 20 staff were employed at the Omagh shop.

14. The claimant Ms McGerty worked at the Bonmarche store at Ann Street, Belfast. She was not obliged to work at any other location other than at that shop. In practice, she did not work at any other location. Fewer than 20 employees worked at that shop.

15. Until January 2012, all of the claimants were employed by Bonmarche Ltd. In January 2012, that company became insolvent and went into administration. On 20 January 2012, there was a relevant transfer (within the meaning of the transfer of undertakings legislation) whereby the business of Bonmarche transferred to Bluebird. Immediately after that transfer, Bluebird began a business restructuring process. The outcome of that process was that many stores, including the stores in which these lead claimants were working, were closed. Because of those closures, these four claimants, among many others, became redundant.

16. The process which culminated in those redundancies did not include any collective consultation process which would have satisfied the requirements of EU Directive 98/59/EC (“the 1998 Directive”), if that Directive applies in the context of those redundancies.

17. That process did not include any collective consultation process which would have satisfied the requirements of Part XIII of the Employment Rights (Northern Ireland) Order (“the 1996 Order”) if that Part applies in the context of those redundancies.

18. The Northern Ireland Region of Bonmarche was under the overall control of a Northern Ireland Regional Manager. Each of the Northern Ireland and Isle of Man store managers reported directly to her.

19. The Northern Ireland Regional Manager visited each Northern Ireland Region store on a monthly basis. The only regular official Bonmarche visitor to each store was the Regional Manager. Official visits from Head Office were extremely rare.

20. In relation to any particular Northern Ireland store, the main function of the Regional Manager was to focus on that store’s key performance indicators, with a view to ensuring that these were being met.

21. Each store was treated by Bonmarche as an individual cost centre.

22. Within each store, recruitment below Branch Manager level was organised and conducted by, or on behalf of, the Branch Manager.

23. Each store’s budget was decided upon centrally, at the Head Office of the company in Great Britain.

24. The stock, layout and sales promotion priorities of each store were decided upon at Head Office.

25. Within any store, the provision of sales items was provided from, or organised by, Head Office, although each Branch Manager had influence in respect of the amounts and types of goods which were to be provided.

26. The Store Manager within each store was responsible for meeting targets in respect of each store.

27. The overall number of staffing hours allowed in respect of each store was decided upon centrally, although with input from the regional and local managers. Within that staffing hours budget, the Branch Manager had discretion as to the numbers of part-time and full-time staff who would be employed.

28. The Lurgan store was the local employment unit of Valerie Lyttle, the Banbridge store was the local employment unit of Ms Halliday, the Omagh store was the local employment unit of Clara Lyttle and the Ann Street, Belfast store was the local employment unit of Ms McGerty.

The claims

29. In each of these four cases, the claimant makes a complaint of unfair dismissal and also makes, or wishes to make, a protective award complaint, pursuant to Article 217 of the 1996 Order.

30. Despite suggestions which have been made on behalf of the respondent to the contrary, we are satisfied that Mr Kilpatrick, on behalf of various claimants, has never committed himself to withdrawing the unfair dismissal claims, regardless of the outcomes of the protective award complaints. (The latter observation is necessary because of comments which have recently been made in writing on behalf of the respondent).

The “leave” applications

31. In each of these four cases, it was argued on behalf of the respondent that the claim form, as currently drafted, did not incorporate a claim for a protective award.

32. Accordingly, it was agreed between the parties that, at the outset of the main hearing, we should decide, in each of the four cases, whether the relevant claimant should be granted leave to amend her claim form so as to include a claim for a protective award. It was also agreed that, if the tribunal did decide to grant such leave, we should then go on to consider whether or not that claim was, or was not, well-founded.

33. In each of these four cases, we assumed that the claim form could not be construed as already containing a protective award complaint. In each case, we decided that each claimant should be granted leave to amend her claim form so as to include a claim for a protective award, and that each claim form should thereafter be deemed to include such a claim. We made those determinations against the following background and for the following reasons.

34. Mr Warnock, realistically, took a neutral stance on the question of whether or not the tribunal should grant leave in each of these four cases.

35. We adopted the reasoning of the United Kingdom Employment Appeal Tribunal (“the EAT”) in Transport and General Workers Union v Safeway Stores Ltd [2007] UKEAT/0092/07/0606. In that case, Safeway had closed the relevant depot, leading to a large number of redundancies. The Union alleged that consultation was inadequate. Proceedings were initially commenced only under the unfair dismissals legislation. The Union subsequently applied to include claims under the Great Britain equivalent of Article 217 of the 1996 Order. The employment tribunal refused that application, because the time-limits for such claims had passed, apparently on the basis that in such a case it had no jurisdiction to permit amendment unless the proposed amendment could be characterised as a “mere relabelling of facts already pleaded”. The Union appealed against that determination, to the EAT. The appeal was allowed, on the basis that the employment tribunal had had a discretion to allow the amendment, notwithstanding that the claims were out-of-time; the EAT decided that, in the particular circumstances of the case, it was proper to allow the amendment. Underhill J noted, at paragraph 17-21 of his judgment in that case:

“17. In my view the proposed amendment should be allowed. I believe there will be a greater injustice to the Union – or, more accurately, to the employees in respect of whom it is recognised – if the amendment is refused than there will be to Safeway if it is allowed. Mr. Stafford submitted to me that the balance was essentially even, because the hardship to the Union of not being able to pursue its claim was balanced out by the hardship to Safeway of being exposed to a claim to which it would otherwise have had a limitation defence. That is true up to a point: I agree, for example, that any argument based on the potential value of the claims, which is on any view very large, is self-cancelling: the bigger the potential loss to the employees, the bigger also the potential saving to Safeway. But the problem with Mr. Stafford's argument is that if those were the only factors to be put in the balance that would apply in every case of an amendment to introduce a new claim out of time and would render the Cocking test largely empty. It is necessary, and appropriate, to bring other factors into the equation. Those which weigh most with me are as follows.

18. First, although, as already established, the claim for breach of the statutory consultation obligations is unquestionably a new claim, it is very closely related to the claim originally pleaded. Both claims depend centrally on the allegation of defective consultation, and all, or almost all, the facts which will be material to the new claim will already have been in play in the old. I am not sure that I would describe it as a mere "re-labelling" of the facts already pleaded: though that is in one sense true, it tends to gloss over the fact that, as the Chairman rightly decided, the claim for breach of the consultation obligations is a claim of a different nature to the claim already pleaded, with different (and additional) consequences. But whether or not it is right to describe the new claim as "mere re-labelling" is not decisive. The important point is that it depends on facts which are, substantially, already alleged. If these proceedings were in the High Court, an amendment to add the new claim would have no difficulty satisfying the requirements of CPR 17.4 (2).

19. Secondly, a claim by the Union for breach of the statutory consultation obligations would reasonably have been anticipated by Safeway as the natural, one might almost say inevitable, concomitant of any individual claims for unfair dismissal based on deficiencies in consultation. It must have been a considerable, though of course welcome, surprise to Safeway and its advisers to find that no such claim was included in the claim form. They will almost certainly have been puzzled by its absence, particularly given that the Union was, anomalously, named in the ET1 as the primary claimant. I was told by Mr. Rose - and I readily accept, since it seems the only possible explanation - that in fact it was always intended on the part of the Union to include such a claim and that it was only omitted as the result of some unspecified mistake or failure of communication within the legal team. (Indeed I think it very likely - though this is not necessary to my reasoning – that Safeway itself will have suspected from the start that the omission was simply a mistake.) In these circumstances, for the employees to be deprived of their claim through a lawyers' blunder seems peculiarly unjust, and the cliché'd description of the benefit to Safeway as a windfall seems peculiarly apt. This is not a case where the new claim was one which will have been unexpected. Mr. Stafford made the point that if this was indeed a lawyers' mistake, any employees who lost out as a result would have a good claim in negligence. I will assume that to be so (although it is not inconceivable that there might be arguable defences), but I do not regard it as a reason for not taking the more straightforward course of permitting the amendment if it would otherwise be fair to do so. As is well-recognised in the authorities relating to the extension of time limits for personal injury claims, a remedy against the claimant's solicitors is not equivalent to the primary remedy which would be lost if time were not extended, and its potential availability is not necessarily decisive against granting such an extension (see, e.g., Hartley v. Birmingham City Council [1992] 1 WLR 968).

20. Thirdly, the application was made reasonably promptly. Safeway was on notice of the intended claims within two or three months of the presentation of the ET 1. It cannot in those circumstances point to any particular prejudice caused to it by the late amendment, over and above the inherent prejudice of being exposed to a claim which could not otherwise have been brought.

21. For those reasons I allow the appeal and permit the Union to amend its pleading in the manner proposed”.

36. In our view, the factual context of the leave application in each of these four cases is very similar to the factual context described in the relevant part of the Safeway Stores judgment. In each of these four cases, the central thrust of the unfair dismissal complaint is a complaint about a lack of consultation. In each of these cases, any delay in making a collective consultation claim has not in any way diminished the respondent’s ability to effectively defend such a claim. Furthermore, the period of any such delay in these cases has been relatively short.

37. In any event, on re-reading the Valerie Lyttle claim form (which was adopted as her claim form by each of the other lead claimants), it seems to us that that claim form, even as originally presented, adequately indicates that the claimant is making a claim under Article 217 of the Order. At paragraph 7.1, in providing details of her claim, Ms Lyttle listed the following:

“Unfair dismissal by way of redundancy”.

In the same paragraph, she separately listed the following:

“Failure to consult over redundancy proposals …”.

Later, at paragraph 7.4 of her claim form, she stated the following:

“I believe the actions were unlawful as the employer failed to hold meaningful consultations”.

The course of the proceedings

38. In each of these four cases, it was agreed between the parties that, at this stage of the proceedings:

(1) Any protective award claim should be determined now, and the unfair dismissal claim should be left for determination at a later stage of the proceedings.

(2) The tribunal should determine only whether or not the claimant’s protective award claim is well-founded. (Subject to any potential appeals on liability, the parties are confident that they can agree the amount of any protective award, in the event of the tribunal making a finding in favour of a claimant on the question of liability).

39. The present proceedings were the subject of a main hearing which took place in September 2012. After the conclusion of that main hearing, the Renfrewshire judgment was issued, (See paragraph 82 below). At that point, Mr Warnock, on behalf of the respondent, submitted written observations in relation to that case. In view of the fact that Mr Kilpatrick is not a lawyer, the main hearing was subsequently re-convened (in December 2012), so that both parties had the opportunity to make oral comments about the implications, if any, of the Renfrewshire judgment for this case.

The central liability issue

40. On behalf of Bluebird, Mr Warnock realistically accepted that the protective award claims of each of these four claimants would be well-founded, if their respective redundancies fell within the scope of Article 216 of the 1996 Order.

41. Accordingly, in determining liability in each of these cases, the only issue is whether or not the relevant lead claimant’s redundancy triggered the collective redundancy consultation obligations which are imposed by the protective award provisions of the 1996 Order.

The protective award legislation

42. In each of these four cases, the protective award claim is made under Article 217 of the 1996 Order. Article 217 is contained within Part XIII of the 1996 Order. That Part of that Order purports to implement the redundancies collective consultation requirements of the 1998 Directive in respect of Northern Ireland.

The 1998 Directive

43. The 1998 Directive is a consolidation of two earlier directives, Council Directive 75/129/EC (“the 1975 Directive”) and a subsequent directive which amended the 1975 Directive (but not in any respect which is material in the context of this case).

44. Article 1 of the 1998 Directive defines its scope. In the context of the present case, Article 1 of the 1998 Directive is for all practical purposes identical to the provisions of Article 1 of the 1975 Directive.

45. Article 1.1 of the 1998 Directive provides as follows:

“1. For the purposes of this Directive:

(a) 'collective redundancies` means dismissals effected by an employer for one or more reasons not related to the individual workers concerned where, according to the choice of the Member States, the number of redundancies is:

(i) either, over a period of 30 days:

- at least 10 in establishments normally employing more than 20 and less than 100 workers,

- at least 10% of the number of workers in establishments normally employing at least 100 but less than 300 workers,

- at least 30 in establishments normally employing 300 workers or more,

(ii) or, over a period of 90 days, at least 20, whatever the number of workers normally employed in the establishments in question;

(b) 'workers' representatives` means the workers' representatives provided for by the laws or practices of the Member States.

For the purpose of calculating the number of redundancies provided for in the first subparagraph of point (a), terminations of an employment contract which occur on the employer's initiative for one or more reasons not related to the individual workers concerned shall be assimilated to redundancies, provided that there are at least five redundancies.”

46. Accordingly, Article 1 of the 1998 Directive (like Article 1 of the 1975 Directive) offers Member States two options.

47. Most Member States have taken the option provided in Article 1.1(a)(i). The United Kingdom has chosen the option provided for in Article 1.1(a)(ii).

48. The Court of Justice of the European Union (“the Court of Justice”) has never had occasion, until now, to consider the scope of sub-paragraph (ii) of Article 1.1(a).

49. However, on several occasions, the Court of Justice has considered the scope of sub-paragraph (i) of Article 1.1(a).

50. In the context of Article 1.1(a)(i), the Court has in essence decided that an “establishment” is the local work unit. In Athinaiki (C-270/05), at paragraph 27 of the judgment, the Court made the following observations:

27. “… [For] the purposes of the application of Directive 98/59, an “establishment”, in the context of an undertaking, may consist of a distinct entity, having a certain degree of permanence and stability, which is assigned to perform one or more given tasks and which has a workforce, technical means and a certain organisational structure allowing for the accomplishment of those tasks”.

51. In the same case, at paragraphs 28 and 29 of the judgment, the Court went on to comment as follows:

“28. Given that the objective pursued by Directive 98/59 concerns, in particular, the socio-economic effects which collective redundancies may have in a given local context and social environment, the entity in question need not have any legal autonomy, nor need it have economic, financial, administrative or technological autonomy, in order to be regarded as “an establishment”.

29. It is, moreover, in this spirit that the Court has held that it is not essential, in order for there to be an “establishment” for the unit in question to be endowed with a management which can independently effect collective redundancies …”

The domestic legislation

52. Some United Kingdom (“UK”) legislation applies throughout the United Kingdom. Some UK legislation applies throughout Great Britain (which consists of England, Scotland and Wales), and applies only to Great Britain.

53. Northern Ireland legislation applies only to Northern Ireland.

54. The United Kingdom has purported to implement the obligations imposed upon it by the relevant Directives (the 1998 Directive and its 1975 predecessor) separately in respect of Great Britain and in respect of Northern Ireland.

55. In respect of Great Britain, the implementing legislation is contained in Chapter II of Part IV of the Trade Union and Labour Relations (Consolidation) Act 1992 (“the 1992 Act”), as amended. That Chapter consists of sections 188 to 192 inclusive. It applies throughout Great Britain, but only to Great Britain.

56. In Northern Ireland, the relevant implementing legislation is Part XIII of the 1996 Order. Part XIII consists of Articles 216 to 226 inclusive.

57. The provisions of Part XIII of the 1996 Order are practically identical to the provisions of Chapter II of Part IV of the 1992 Act.

58. We have no doubt that the legislator of Part XIII of the 1996 Order intended it to have precisely the same scope as Chapter II of Part IV of the 1992 Act.

59. The United Kingdom has at least three distinct legal systems: the England and Wales legal system, the Scottish legal system and the Northern Ireland legal system. Each legal system has its own separate hierarchy of courts and tribunals. The United Kingdom Supreme Court is the supreme court of each of those legal systems.

60. The United Kingdom Supreme Court has never pronounced on any matter which is of direct relevance in the context of the central issue in this case.

61. Decisions of the United Kingdom Employment Appeal Tribunal (“EAT”) are binding upon employment tribunals in Great Britain (“GB”), but are not binding on Northern Ireland tribunals. However, in practice, EAT decisions are always treated as having considerable persuasive value in Northern Ireland. Decisions of the EAT in respect of GB legislation which is practically identical to Northern Ireland legislation are usually followed by Northern Ireland tribunals.

62. The Northern Ireland Court of Appeal has never pronounced on any matter which is of direct relevance in the context of the central issue in this case.

63. Article 216 of the 1996 Order defines the scope of the provisions of Part XIII. Article 216(1) provides as follows:

“(1) Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissals all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals; … ”

64. It will be noted that Article 216(1) refers to a threshold redundancy figure of “… 20 or more employees at one establishment within a period of 90 days or less … [our emphasis]”.

65. Accordingly, on the face of it, Article 216 seems to apply to redundancies within a particular “establishment” only if 20 or more employees are being made redundant within that particular establishment.

Why the scope of the directive is relevant in these cases

66. In MSF v Refuge Assurance Plc [2002] ICR 1365, in construing the Great Britain equivalent of Article 216, the EAT decided that the term “establishment” in that provision should be defined in the same way as that term had been defined in the context of Article 1.1(a)(i) of the Directive, by the Court of Justice.

67. That aspect of the MSF decision has been applied, on numerous occasions, over many years, by employment tribunals throughout Great Britain.

68. Accordingly, in the interests of judicial comity, we consider that it is strongly arguable that we ought to follow that aspect of the MSF decision, in determining the scope of Article 216, if doing so would not result in any contravention of the requirements of the Directive.

69. If we follow that course, then, in light of the facts of each of these cases, the protective award complaint of each of these four claimants are likely to fail. (In each of these four lead cases, we are satisfied that the shop in which the relevant claimant worked was that claimant’s local work unit, and that it was “the establishment” to which she belonged, if that term is defined in the sense in which it was defined in the Court of Justice case law on the scope of Article 1.1(a)(i) of the relevant directives).

70. That is why the questions which are posed at the end of this Decision are relevant in the circumstances of these cases.

The arguments of the parties

71. Bonmarche did not recognise any trade union for collective bargaining processes, and there were no “employee representatives” within the meaning of Article 216 of the Order. Accordingly, the parties agree that, under Article 217(1)(d) of the Order, each claimant has the standing to make her complaint in respect of a protective award.

72. Mr Kilpatrick has a trade union background. He is not a trained lawyer. Although he presented his arguments in this case with clarity and courtesy, he recognised that he was in no position to present detailed arguments in relation to complicated issues of European employment law.

73. Mr Kilpatrick’s arguments in these four cases can be summarised as follows. First, even if the protective award legislation 1996 Order is construed without reference to any requirements of European law, the proper construction is to regard the Northern Ireland Region of the respondent as the “establishment”, in the context of each lead claimant’s protective award claim. Secondly, there would be a failure to comply with the requirements of the Directive if we were to fail to regard each lead claimant as having been within the scope of the collective redundancy consultation provisions of the 1998 Directive. Thirdly, in construing “establishment”, in the context of the 1998 Directive, we ought to define “establishment” in the same way as “business establishment” has been interpreted, in the context of value added tax, by the Court of Justice. Fourthly, in the event of the Court of Justice deciding that the scope of the Directive is broader than the apparent scope of the 1996 Order, there is nothing to stop us construing the 1996 Order provisions more broadly, in order to bring the meaning of those provisions into line with the meaning of the corresponding provisions of the Directive.

74. For the respondent, Mr Warnock provided written statements of his arguments in two written Submissions (“Submissions”). The first of those Submissions, which we will call “RS1” was provided to us in September. The second of those Submissions was provided to us prior to the December 2012 segment of the main hearing. Because of the existence of those two Submissions, it is unnecessary for us to provide a comprehensive written record of all of Mr Warnock’s arguments. However, we do refer to some of those arguments below, in the context of our discussion of the matters which have to be considered at this stage of the case. Mr Warnock’s arguments can be summarised as follows. First, if Article 216 is interpreted without reference to the requirements of the 1998 Directive, it is clear that “establishment”, in Article 216, refers only to the relevant claimant’s local work unit, and it is also clear that the relevant establishment must have been the subject of at least 20 redundancies, if Article 216 is to apply. Secondly, Mr Warnock recognised that there have been suggestions, both in case law and in commentaries, that there is a mismatch between the scope of the 1998 Directive and the scope of Article 216. However, he argued, in reality, it was clear that the Directive only applies in the context of a local work unit, and that the figure of 20, in Article 1.1(a)(ii) of the 1998 Directive, applies per establishment (as distinct from applying to several or all, of an employer’s “establishments”). Thirdly, even if Article 216, on the face of it, was narrower in scope than the scope of the 1998 Directive, any such non-compliance with the Directive’s requirements was something which could not be remedied through any process of purposive or “broad” interpretation on our part. Fourthly, in the exercise of our discretion, we should decline to refer any questions, for a preliminary ruling, to the Court of Justice. (Instead, we should leave it to the Court of Appeal, in the event of there being any appeal from our Decision in these lead cases, to decide whether or not any such reference should be made).

Should we make a reference?

75. We asked the parties for their views, as to whether this tribunal should make a reference to the Court of Justice, for a preliminary ruling on questions relating to the threshold, for collective redundancies, which is imposed by Article 1(a)(ii) of the 1998 Directive. Mr Kilpatrick, on behalf of the claimants, asked us to make such a reference. On behalf of the respondent, Mr Warnock urged us not to make a reference, for reasons which are detailed in RS1.

76. We have decided to make a reference, against the following background and for the following reasons.

Acte clair?

77. Mr Warnock urged us not to make a reference because the issue is “acte clair”.

78. In particular, he says that it is quite obvious that the meaning of “establishment” must be the same throughout Article 1 of the 1998 Directive. He points out that the Court of Justice has defined “establishment”, in the context of the 1998 Directive, as the local work unit, to which the relevant employees were assigned for the purpose of carrying out their work duties.

79. The Court has indeed so defined the term “establishment”, but only in the context of Article 1(a)(i): The Court has never previously had occasion to define the term in the context of sub-paragraph (ii). We think it likely that, if and when called upon to do so, the Court would define the term in the same way, for the purposes of sub-paragraph (ii) as it has already defined it for the purposes of sub-paragraph (i). However, in our view, the matter is not free from doubt, particularly in light of the relentlessly purposive approach which the Court has taken, in carrying out its task of defining the term for the purposes of sub-paragraph (i).

80. The aggregation issue is obviously not free from doubt. (The aggregation issue is the question of whether or not the phrase “at least 20”, in Article 1.1(a)(ii), refers to the number of dismissals across all of the employer’s establishments, or whether it instead refers to the number of dismissals per establishment).

81. In MSF, the EAT (Lindsay J presiding) expressed the view, at paragraph 52 of the judgment, that the then prevailing Great Britain legislation, which corresponds to Article 216 of the Order, seemed to be incompatible with the Directive, in requiring a threshold of at least 20 redundancies over 90 days per establishment, as distinct from applying a threshold of 20 persons over 90 days throughout all of the employer’s establishments.

82. More recently, in Renfrewshire Council v The Educational Institute of Scotland [2012] UKEAT 0018/12, the EAT (Langstaff J, the current President of the EAT), at paragraph 26 of the judgment, made the following observation:

“… [There] seems to me to be force in the view of the Appeal Tribunal expressed in paragraph 52 in MSF that the Act might not be compatible with the Directive, since the word in s.188 is “establishment”, in the singular, whereas in the Directive it is in the plural – “the establishments in question””.

83. The EAT is the most senior specialist employment court in the United Kingdom. As already noted above, although EAT decisions are not binding upon a Northern Ireland employment tribunal, they obviously must be treated by us with considerable respect.

84. In a June 2012 Department for Business Innovation and Skills consultation paper on collective redundancies (at paragraph 3.19 of that paper), the current United Kingdom government has expressed the belief that the 20 employees per establishment threshold, as set out in the GB equivalent of Article 216 of the Order, was “… in keeping with the [1998] Directive”.

85. Accordingly, the current situation is that judges in the senior employment court within the United Kingdom have expressed the view that the 20 employee per establishment threshold may well be incompatible with the requirements of the Directive, and the UK Government is expressing a belief that the threshold is entirely in line with the Directive. Against that background, it seems to us that the case for seeking an authoritative ruling, from the Court of Justice, is overwhelming.

86. Incidentally, Mr Warnock argued that the current UK Government’s view, on the question of whether or not the threshold provisions of the GB equivalent of Article 216 is in compliance with the Directive, is an admissible aid, for an industrial tribunal, in considering whether or not the relevant provision of the 1996 Order is indeed a proper reflection of the requirements of the Directive. We reject that argument.

Irremediable?

87. Mr Warnock’s second argument is that, even if the current threshold in Article 216 is not in compliance with the requirements of the Directive, that non-compliance cannot be remedied by us (by adopting an interpretation of Article 216 which would bring it within the requirements of the Directive). We reject that proposition also.

88. The proposition is largely based on comments which were made by Lindsey J in MSF, at paragraph 52, where he commented as follows (immediately after expressing the view that the 20 person per establishment criterion, in domestic legislation, might well be a non-compliance with the Directive’s requirements):

“In this respect, too, it appears to us to differ from the Directive to a degree irremediable by construction. Again, given that MSF are neither able to enforce the Directive nor to disapply the section, we are left with the task of applying a straightforward construction of the language of the section to the facts. Thus there arises the question of what is “an establishment”. The question is important in the case before us as field staff workers worked in relatively small units which, if each was separately regarded as an establishment, would effectively disapply section 188 simply by reason of the smallness of the branches concerned and the thin spread of redundancies over a large number of them”.

The reason for that view, as to the alleged “irremediability” of the relevant non-compliance, was explained at paragraph 54 of the MSF judgment:

“[In] section 188 the word should, if possible, be given the meaning ascribed to the same word in the Directive by Rockfon supra”.

89. We are not as pessimistic as the EAT was in MSF, regarding the prospects of our being able to construe Article 216 in a manner which would bring that Article into compliance with the requirements of the Directive, if the Court of Justice decides that construing Article 216 as applying a threshold of 20 persons per
“Rockfon-type” establishment is a construction which brings Article 216 outside the requirements of the Directive.

90. First, there is no legislation binding upon us which would require us to construe “establishment” in Article 216 as having the same meaning as “establishment” in the Directive.

91. Secondly, we know of no case law, which is binding upon us, and which would require us to define a term in domestic legislation in the same way as it has been defined in an EU directive, other than in circumstances in which the adoption of such a common definition would assist in bringing the relevant domestic legislation into line with the requirements of that directive.

92. Thirdly, it seems to us that, if the Court of Justice decides that the 20 person threshold has to be applied across a number of establishments (as distinct from being applied per establishment), it might be possible to define “establishment”, for the purposes of the Article 216, as referring to some organisational unit, within the relevant employer, which is broader in scope than any of the various individual local employment units.

93. Fourthly, in Renfrewshire, at paragraph 27 of the judgment, Langstaff J raised the question of whether any potential non-compliance, in the Great Britain equivalent of Article 216, could be addressed on the basis that the Interpretation Act 1978 (which does not apply to the 1996 Order) contains a provision to the effect that, in an enactment, the singular can in some circumstances be deemed to include the plural. (The Interpretation Act (Northern Ireland) 1954, which does apply to the 1996 Order, contains a provision which is in all material respects equivalent to the Interpretation Act 1978 provision which was referred to by Langstaff J).

94. Fifthly, in any event, in their interpretation of domestic legislation, senior judges throughout the United Kingdom have sometimes notionally “added” words to that legislation, for the purpose of bringing it into line with the requirements of an EU Directive. (See, for example, EBR Attridge Law LLP v Coleman [2010] IRLR 10).

Leave it to a superior court to decide whether to refer?

95. As Mr Warnock has very fairly accepted (in RS1), UK case law makes it clear that there is no inflexible rule that a first instance court can never properly refer a question to the Court of Justice.

96. However, he argued that we should not ourselves refer these issues to the Court of Justice. Instead, he urged us to leave it to the Northern Ireland Court of Appeal (in the event of any appeal from our Decision), to make such a reference, if that Court then considered it to be appropriate to do so. Mr Warnock also says that a reference to the Court of Justice at this point may cause considerable delay. So it may.

97. However, in our respectful view, the position is as follows. First, the issues which are central to the resolution of the protective award claims in these cases are of considerable general importance. Secondly, they are difficult legal issues. Thirdly, only the Court of Justice is likely to be able to provide final and authoritative answers in respect of those issues. Accordingly, in our opinion, it is better that the matter is referred now, rather than being referred, some considerable time later, by the Court of Appeal.

The respondent doesn’t want us to make a reference

98. Mr Warnock made the point that the respondent does not wish us to refer this case to the Court of Justice. However, we note that the claimants do wish us to do so. In any event, the views of the parties cannot be determinative on the issue of whether a reference ought to be made.

Our views

99. The CJEU Information Note “on references from national courts for a preliminary ruling” [2011/C 160/01], at paragraph 23, makes the following comment:

“23. Finally, the referring court may, if it considers itself able, briefly state its view on the answer to be given to the questions referred for a preliminary ruling.”

Accordingly, in the following two paragraphs, we have set out some tentative comments .

100. We note that some commentators have suggested that the Court of Justice might wish to interpret “establishment” differently, in the context of Article 1.1(a)(ii), from the way in which the Court has interpreted that term in the context of Article 1.1(a)(i). However, the term “establishment” is used twice within the same Article of the same Directive; therefore, in our view, it is very likely to have the same meaning on each occasion on which it is used in that Article.

101. In our view, in the context of the aggregation issue, the wording of Article 1.1(a)(ii) is genuinely ambiguous. For that reason, in our view, the Court of Justice could legitimately interpret that provision either way. (In other words, the Court could legitimately interpret the relevant provision’s reference to the figure 20 as being a reference to the number of employees within a particular establishment, or it could legitimately interpret the figure of 20 as a reference to those who were dismissed throughout the employer’s entire undertaking). Because either interpretation would be consistent with the wording of the relevant provision, a purposive interpretation is particularly appropriate, in the circumstances. We note that, in Rockfon A/S v Specialarbejderforbundet i Danmark (C-449/93) [1996] ICR 673, the Court stressed that the predecessor of the 1998 Directive should be interpreted as broadly as possible, with a view to maximising the number of redundancy-related dismissals which would be brought within a scope.

The questions referred

102. The parties have had the opportunity to comment upon an earlier draft of the questions which are now being referred, and they did provide such comments. The questions now being referred, and the wording of those questions, have been drafted after full account was taken of those comments.

103. On behalf of the claimants, Mr Kilpatrick requested us to ask the Court whether “any interpretation of the term [“establishment”], other than that which the ECJ gave in Gunter Berkholz and DFDSA/S, would be contrary to Article 5 of Council Directive 98/59/EC”. We have decided not to ask such a question, because we consider that Gunter Berkholz [1995] 3 CMLR 667, which addressed issues on the definition of “establishment” in the context of VAT, is of limited relevance in the circumstances of the present cases.

104. We refer the following questions to the Court of Justice:

(1) In the context of Article 1.1(a)(ii) of the 1998 Directive, does “establishment” have the same meaning as it has in the context of Article 1.1(a)(i)?

(2) If not, can “an establishment”, for the purposes of Article 1.1(a)(ii), be constituted by an organisational sub-unit of an undertaking which consists of or includes more than one local employment unit?

(3) In Article 1.1(a)(ii) of the Directive, does the phrase “at least 20” refer to the number of dismissals across all of the employer’s establishments, or does it instead refer to the number of dismissals per establishment? (In other words, is the reference to “20” a reference to 20 in any particular establishment, or to 20 overall?)

Next steps

105. We intend to refer the above questions to the Court of Justice as soon as practicable after the expiration of the period of six weeks beginning on the date on which this Decision is issued.

Chairman:

Date and place of hearing: 19-21 September and 18 December 2012, Belfast.

Date decision recorded in register and issued to parties: