It was announced yesterday (Wednesday 13th November 2024) that the retailer, Homebase, is entering administration and that this will place up to 2000 jobs at risk. It is naturally an extremely stressful time for the affected employees in any business in these circumstances, not least in the run-up to Christmas. So what rights do employees have and can they claim for a failure to consult prior to being dismissed?
If a business becomes insolvent and is unable to pay its employees, there are certain protections in place to enable staff members to recover monies from the Government, although a week’s pay is capped at the maximum sum of £700 per week. They can claim for statutory notice pay, holiday pay, arrears of wages and statutory redundancy pay.
One claim that many employees forget about is a potential claim for what is known as a “protective award”. This arises where 20 or more individuals are employed by the same employer at the same establishment, which often means at the same site. If the employees at that establishment are dismissed without the employer or the administrator carrying out consultation with employee representatives starting at least 30 days before the first dismissal takes effect, there is a potential claim for a protective award by each of the employees for up to 90 days’ pay.
If the employees are successful in bringing a claim for a protective award to an employment tribunal, they will be awarded up to 90 days’ pay, again capped at £700 per week. They can recover up to 8 weeks of this from the Government, which means that in some cases an employee could recover an extra £5,600 over and above their other claims for statutory notice pay, holiday pay, and statutory redundancy pay.
We have represented groups of employees in recent months and years in claims where they have been successful in bringing protective award claims as a group action. There are strict time limits for pursuing these claims and therefore any affected employees ought to take legal advice as soon as their employment is terminated without the required consultation, where there are 20 or more employees being dismissed from their establishment within a 90 day period.