Former Debenhams staff begin legal action over redundancy notice

Former workers at retailer Debenhams are launching legal action amid claims that they were not given enough notice for redundancy.

Around 800 former employees of the department store, which is now owned by online retailer Boohoo, are taking part in two group actions to employment tribunals.

According to City AM, staff who previously worked for the firm have stated that they should have collectively consulted with staff for 45 day periods in 2020 and 2021 to ensure that employees could source new jobs.

This comes after the collapse of the stores caused 18,500 job losses over the past year, where some employees reported that they were informed of their redundancies via a “a scripted phone call from the store manager” or video call.

Despite many employees having worked at the firm for decades, they stated that they were given just a couple of days notice regards their job status.

A spokesperson for SDM, who is representing around 300 former staff members, said: “Some of our clients have worked for Debenhams for their entire working life and so the administration, the way in which the redundancy process was handled and the widely-reported issues regarding the alleged pension deficit is a devastating reality.”

Following the allegations, claimants could receive a maximum award of 90 days per day if successful, with payout set to be made through the Government Insolvency Scheme.

As a result, the government would underwrite up to eight weeks of the 90 days while payments for those made redundant after 6 April 2021 will be capped at £544.

‘Cautionary tale’

Commenting on the legal action from former employees, Rhona Darbyshire, partner and head of employment at law firm Cripps Pemberton Greenish, has shared that other businesses should read this as a “cautionary tale”.

She explained: “Covid or no Covid, if an employer decides to make large-scale redundancies without holding a proper consultation, they are likely to receive a significant backlash from ex-employees who have very real grounds for taking them to court.”

Darbyshire noted that the time it takes to hold a consultation with staff is nothing compared to the stress and negative PR brought about by “having to fend of a legal claim”.

“Whilst it is acknowledged by the courts that an insolvency situation can make consultation more difficult, employers should ideally include staff at every possible step of the process and prioritise open and clear communication,” she continued.

What does the law say?

While it is unsurprising to see a legal claim mounted against Debenhams, as echoed by Darbyshire, the law states that businesses within to make 20 people or more redundant are required to hold a collective consultation.

Darbyshire concluded: “Consultations must address the avoidance of redundancies, reducing the number of dismissals, and mitigating the consequences of redundancy. Consultations must run for a minimum of 30 days where 20 or more people are to be dismissed and for 45 days where 100 people or more are to be dismissed.

“Insolvency does not remove the duty to consult collectively, however, financial and trading situations will be taken into account by the courts when considering the level of compensation to award successful litigants.”