In 2020, the UK Supreme Court made a significant decision in the case of Lyttle v Bluebird UK Bidco 2 Ltd. The court ruled that employees who were transferred to a new employer as a result of a business sale could bring claims for unfair dismissal against their new employer.
The court's decision was a major shift in the law, as it allowed employees to pursue claims against their new employer, even if the new employer had not directly employed them. This decision had significant implications for employers and employees alike.
The case involved a group of employees who were transferred to a new employer as part of a business sale. The employees had been employed by the original company, but were transferred to the new employer as a result of the sale.
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Court's Reasoning
The court's reasoning in the Lyttle v Bluebird UK Bidco 2 Ltd case was guided by a desire to provide clarity and consistency in the interpretation of EU law.
The tribunal first addressed procedural matters, granting leave to amend claim forms to include protective award claims, applying the reasoning from the Safeway case.
This decision allowed the court to examine the meaning of "establishment" under Article 216 of the 1996 Order and the corresponding provisions of EU Directive 98/59/EC.
The tribunal noted that the Directive provides two options for thresholds on collective redundancies, but the UK has adopted the aggregated threshold option, which is applied per establishment by domestic legislation.
The court acknowledged that the CJEU has not previously ruled on the aggregated threshold option, and that the Directive's wording regarding the threshold is ambiguous.
Given the conflicting views in UK case law and government consultations, the tribunal decided to refer specific questions to the CJEU for authoritative interpretation under Article 267 TFEU.
The tribunal rejected the respondent's arguments that the issue was acte clair and that any non-compliance with the Directive could not be remedied by interpretation.
The court also rejected the suggestion to defer referral until appeal, reasoning that early authoritative guidance was preferable due to the legal complexity and general importance of the issue.
Suggestion: Scrip Issue
The tribunal formulated precise questions to the CJEU concerning the meaning of "establishment" in the Directive and the interpretation of the redundancy threshold.
The tribunal decided to refer key questions regarding the interpretation of Article 1.1(a)(ii) of EU Directive 98/59/EC on collective redundancies to the Court of Justice of the European Union for a preliminary ruling.
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