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Employment Law Case Update: Collective Redundancies

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When it comes to making redundancies, even the well known brands can still get it wrong.  Our Employment Law team today review the recent case of Ms T Low and Others v Jamie’s Italian Ltd (in administration) and the importance of the building bricks of proper redundancy procedures.

Celebrity chef Jamie Oliver’s restaurant group went into administration in 2019, resulting in the closure of 22 restaurants and the loss of over 1,000 jobs. In a claim filed in 2019, over 60 former employees of three subsidiary companies – Jamie’s Italian, Fifteen restaurant, and One New Change – alleged that the companies failed to conduct proper consultations before making them redundant.

The Employment Tribunal (ET) agreed with the former employees. It ruled that the companies “failed to adequately comply with a requirement of section 188 of the Trade Union & Labour Relations (Consolidation) Act 1992.” This Act states that employers who plan to make twenty or more redundancies in a ninety day period have a duty to consult with the affected employees or their representatives. Where the employer plans on dismissing between twenty and ninety-nine employees, the Act requires the employer to begin consultation at least thirty days before the first redundancy notice takes effect. Where the employer is planning on dismissing a hundred or more employees, the required period is forty-five days.

The purpose of the consultation period is to try to minimise the harm caused by the redundancies to the employees. The consultation should include discussion of any possible ways to avoid or reduce the number of dismissals. The employees’  representatives (either a recognised trade union or employees elected for that purpose) should be given statutory information including:

  • the number of redundancies to be made,
  • the reason for making them, and
  • how redundancy pay will be calculated.

The consultation period does not begin until the information has been delivered.   

If an employer fails to complete the required consultation period, the ET may order a protective  award of up to 90 days’ full pay for each affected employee. That’s a quarter of the payroll! In the present case, the ET ordered the companies to pay the former employees their wages for a period of fifty-six days.

Employers who are considering redundancies must be aware of their consultation obligations. They should know how far in advance they must begin the consultation period and what the consultation period is expected to accomplish. A genuine, fair consultation period conducted in plenty of time may also help employers avoid future unfair dismissal claims and costly pay-outs to former employees.

If you have any questions regarding this article, you can call our Employment team today on 023 8071 7717 or email employment@warnergoodman.co.uk.

This was previously part of our weekly Employment Law Newsletter. If you would like to subscribe, please email us at events@warnergoodman.co.uk or just fill in our subscription form.

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.