A collapsing Oldham law firm, Broadway Legal Limited trading as Broadway Solicitors, who made redundancy announcements to its staff by text message have been ordered by an Employment Tribunal to make a protective award of 90 days’ pay to one of its employees.
What happened in the redundancy case?
The Claimant, Mr Evans, brought a tribunal claim for a protective award in respect of a breach of the collective consultation requirements pursuant to the Trade Union and Labour Relations (Consolidation) Act 1992. Under section 188 of the 1992 Act, an employer has a duty to consult when they propose to dismiss, as redundant, 20 or more employees at one establishment within a period of 90 days or less.
The Tribunal held that staff had been given no proper warning or notice that they were at risk of redundancy; no consultation had been carried out with them and no employee representatives had been elected or appointed for any such consultation. It was only on 11th November 2018 that the Claimant was informed, by way of text message, that he should not come in to work the next day and that there would be a meeting later that week on 14th November.
The meeting on 14th November never took place and the Claimant was told a day after receiving the text message that he had been made redundant as of 9th November together with 20 other employees. The other dismissals took effect at the same time as the Claimant’s and the tribunal heard there was no attempt to provide information or conduct a collective consultation.
As a result, Regional Employment Judge Parkin held that the firm was in breach of its duty under the 1992 Act and made an award to the Claimant for the maximum protected award of 90 days, commencing on 9th November 2018.
Broadway Legal did not submit a response so the judgment was issued without a hearing being required.
The law firm, who were later closed down by the Solicitors Regulation Authority (SRA) on 22 November 2018 were formally put into creditors voluntary liquidation in December 2018.
The SRA stated that it was satisfied that the Manager of the firm had failed to comply with the rules applicable to him.
According to a statement lodged at Companies House, Broadway Legal, who specialised in personal injury and immigration law, folded with £1,000,000 of ongoing work, which is expected to realise around £800,000 to pay creditors – £20,000 to cover employees’ redundancy pay and around £750,00 to medical agencies.
What can employers learn from this case?
It is always important to ensure that if a company believes that it will go into liquidation, at least some form of consultation should be carried out. The full amount of a protective award is 90 days’ pay. However, this is the starting point and the amount may be reduced if some form of consultation took place.
For further advice and assistance for the redundancy process, please contact our Employment Law & HR team on 0161 475 7676.