Comet workers win 90 day redundancy pay out against Deloitte over failure to consult (12-6-2014)Former workers from the collapsed electrical retailer Comet are in line for thousands of pounds of compensation following a tribunal ruling.
The Leeds employment tribunal ruled that staff were not properly consulted about their redundancies, meaning that they could receive a payout equivalent to up to 8 weeks’ pay worth £450 a week.
The tribunal found that misleading information had been given to representatives about redundancy proposals, there had been no election of representatives, and there had been no consultation. The judgement stated that Deloitte, the administrators of Comet, “failed to comply with its obligations to consult trade unions and representatives of employees affected by proposed redundancies”.
During the hearing concerns were raised about the financial background to Comet’s case. The Needle Partnership LLP represented 275 ex-Comet employees. The firm’s Employment partner Victoria Robertson said “a corporate raid by private equity investors resulted in a 75 year old British company being destroyed and nearly 7,000 jobs being lost.”
Ms Robertson went on to say “During the Tribunal case it emerged that they had been lied to, misinformed, and treated with very little dignity or respect whilst Comet’s owners extracted the maximum value from the business.”
Administrators Deloitte were paid £5m in fees, and retail consultants involved in store management and closures were paid £7.2m
The total payout to former employees could amount to up to £25 million. As Comet has no funds of its own to make this payment, the sums due to employees will come from the taxpayer-funded National Insurance Fund.
At the moment it is unclear how many former employees will receive compensation due to the rules governing who can claim. Further legal action will now determine who is eligible for a payout.
A further judgement in the Comet case has clarified which former employees will be eligible for a share in compensation. The tribunal judge ruled that claims will be valid if they were made either by individuals or by representatives acting for other employees.
While this means that some workers will not be eligible, Victoria Robertson said that it was good news for many. This is because, even where employees have not made a claim themselves, they could still receive compensation if their manager, union representative or another representative had put in a claim.