Usdaw & Anor v Ethel Austin Ltd & Ors

Under article 267, a court must first decide whether a ruling on particular questions is necessary to enable it to give judgment. If that threshold is met, referral remains discretionary. A related pending CJEU reference does not require a stay where its outcome may not dispose of the domestic appeal and a further question may independently become necessary. The court may also consider whether materially affected interests are represented in the pending proceedings. Those factors supported a reference on the construction of Directive 98/59 EC and on whether the Secretary of State could rely on non-implementation to resist a domestic claim based on vertical direct effect.

Employees of Ethel Austin and Woolworths brought claims for protective awards after the companies became insolvent and their employees lost their jobs. The claims concerned the consultation duty in section 188 of the Trade Union and Labour Relations Consolidation Act 1992. The Employment Appeal Tribunal, in a judgment dated 30 May 2013, held that section 188 did not fully implement the Directive and deleted the requirement for dismissals to occur at one establishment.

On appeal, the Secretary of State sought a stay pending the CJEU proceedings in Lyttle v Bluebird. The employees sought a further reference under article 267, including a possible question concerning vertical direct effect. The Court of Appeal considered only whether to stay or refer, not the substantive correctness of the EAT's decision.

Lord Justice Maurice Kay delivered the lead judgment. Lord Justice Briggs and Lady Justice Macur agreed.

1. Article 267 threshold. The court must first ask whether a decision on particular questions is necessary to enable it to give judgment. If necessity is established, the making of a reference is discretionary.
2. Reference rather than stay. The pending reference in Lyttle v Bluebird might have been dispositive of the domestic appeals, but it might not have been. A further aspect of the domestic appeals could also raise a question satisfying the necessity test. Those circumstances supported a reference rather than a stay.
3. Representation of affected interests. In exercising its discretion, the court could take account of the fact that the employees in Lyttle were not legally represented in the CJEU proceedings, whereas the present employees were supported by a major trade union. The issue had potentially wide consequences, so the CJEU might be assisted by representation of the employees' interests.
4. Vertical direct effect. The question whether the Secretary of State could rely on a failure to implement the Directive to defeat a putative domestic claim was not before the CJEU in Lyttle. It was therefore appropriate to include that question in the reference. The employees' submission was said to gain support from Foster v British Gas [1990] ECR 13313, but the Court of Appeal did not determine the substantive direct-effect issue.
5. Disposition. The court directed that a reference be made to the CJEU concerning construction of the Directive and vertical direct effect. The substantive appeal from the EAT was not determined.

• Court of Appeal (Civil Division): On 22 January 2014, the court decided the preliminary issue in favour of referring questions to the CJEU rather than staying the appeal. The substantive appeal was left undetermined: [2014] EWCA Civ 142.
• Employment Appeal Tribunal: On 30 May 2013, the EAT allowed the employees' appeals, holding that section 188 of the Trade Union and Labour Relations Consolidation Act 1992 did not fully give effect to the Directive and deleting the single-establishment requirement. Permission to appeal was granted.