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Article

Former BHS staff seek compensation

Article

Former BHS staff seek compensation

30 Jan 2017

2 minute read

Following the claims of former BHS employees, Clive looks at the complications surrounding redundancy as a consequence of insolvency.

Former BHS staff seek compensation - news article image

111 people who worked in the head-office of BHS are pursuing compensation over the way they were made redundant. JWK solicitors, who are representing those employees based in the retailer’s former London headquarters, alleges that the administrator didn’t fulfill their legal duty. The reason being that they did not consult with staff for at least 45 days before making them redundant.

If their case is successful, the former employees could be awarded up to 90 days’ wages following April’s tribunal. This would equal a total of between £500,000 and £1 million being paid out by the government and the BHS estate.

From my experience, the issue of consultation with employees that may be at risk of redundancy is extremely complex and one that has seen substantial and prolonged litigation in the past. The demise of Woolworths being the obvious example.

The key issue in such cases is whether an individual store is classed as an establishment. If the store is seen to be an establishment with over 20 staff, then a consultation is a requirement. In the case of BHS, it is clear that the headquarters were an establishment and more than 20 staff worked there, so the issue is about the length of consultation. The administrator, however, is likely to focus upon the lack of funding to keep the business going (to enable consultation for the required statutory period). Alternatively, they may also look at the fact that they were trying to find a buyer and therefore, didn’t anticipate that the head office staff would be made redundant.

If any employees find themselves being made redundant, Shaw Gibbs are able to offer advice and support them through the redundancy process. We can deal with the administrator or liquidator, as well as the Redundancy Payments Office, who process and pay out employees who suffer losses as a consequence of insolvency.

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Need expert advice?

Speak to an expert for advice on
+44-1865 292200 or get in touch online to find out how Shaw Gibbs can help you

Email
info@shawgibbs.com

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