A group of former BHS workers have altogether won up to £1m in compensation over the summary way they were made redundant when the retailer collapsed.
A London employment tribunal awarded 110 employees at the firm’s head office up to 90 days’ wages after their lawyers successfully argued that the company did not conduct a proper consultation process with them ahead of their dismissal.
The employees were represented by the law firm JWK, which successfully argued that BHS failed to fulfil its legal duty to consult with staff for at least 45 days before making them redundant when the retailer collapsed last April.
The tribunal ruled there had been “a complete failure to consult” and that the claimants should receive the maximum protective award.
“We are very pleased that the claim has been successful and that the claimants will at last receive some compensation for the way they were treated,” said JWK’s director, Carl Moran. “It’s a very complex area of law and we were pleased to assist in achieving this just outcome.”
JWK brought the claim against BHS and the government on behalf of former staff. The business department therefore will have to hand the staff the equivalent of 40 days’ pay, and the defunct company’s estate will be liable for the remaining 50 days’ money. Payments will vary in size depending on salaries but the government’s contribution is capped at £3,800 per person.
When BHS collapsed into administration a year ago, with the loss of 11,000 job losses, it was the biggest high-street failure since that of Woolworths, which went into administration in 2008. The retailer had been owned by Sir Philip Green for 15 years until he sold it to Dominic Chappell, a former bankrupt, for just £1 in March 2015.
The retailer lasted just a year under the control of Chappell’s consortium and its unravelling finances would become the subject of a high-profile parliamentary inquiry which concluded that the company had been systematically plundered by its owners. During his ownership, the Green family and other shareholders collected at least £580m from BHS in dividends, rental payments and interest on loans. Green recently resolved the long-running row over the hole in the BHS pension fund deficit by agreeing to hand over £363m in cash to rescue it.
It is not the first time there has been a clash between insolvency and employment regulation. In 2014 Comet workers won a multimillion pound payout after a tribunal ruled that the company and its administrator, Deloitte, failed to consult staff properly when nearly 7,000 people were made redundant in 2012. The Leeds employment tribunal awarded staff up to 90 days’ pay, ruling that staff were misinformed and some made redundant within hours of being consulted.
In 2016 lawyers also won an employment tribunal claim on behalf of 340 City Link employees over the failure to properly consult when the parcel delivery firm imploded on Christmas Eve.
