Mr K Iliev and Mrs S Ilieva v Atlantic Laundry Ltd: 1401274/2024

EMPLOYMENT TRIBUNALS

Case No 1401274/2024

Between

Mr K Iliev and Mrs S IlievaClaimant

Atlantic Laundry LtdRespondent

Before

Employment Judge N J Roper

In person for claimant

Date 15 April 2025

JUDGMENT

[1]The first claimant Mr K Iliev is entitled to a statutory redundancy payment in the sum of £1,644.21. In addition, he was unfairly dismissed, and the respondent is ordered to pay the first claimant compensation for unfair dismissal in the sum of £1,816.76; and

[2]The second claimant Mrs S Ilieva is entitled to a statutory redundancy payment in the sum of £1,644.21. In addition, she was also unfairly dismissed, and the respondent is ordered to pay the second claimant compensation for unfair dismissal in the sum of £1,816.76; and

[3]The Recoupment Regulations do not apply.

REASONS

[1]In this case the claimants Mr Kalin Ilieva and his wife Mrs Stela Ilieva, who were dismissed by reason of redundancy, bring claims in respect of their statutory redundancy entitlement, and they also claim that they have been unfairly dismissed. The respondent accepts that the reason for the dismissals was redundancy, but that the dismissals were fair in the circumstances.

[2]This has been a remote hearing which has been consented to by the parties. The form of remote hearing was by Cloud Video Platform. A face to face hearing was not held because it was not practicable, and all issues could be determined in a remote hearing. The documents that I was referred to are in a bundle of 70 pages, the contents of which I have recorded. The order made is described at the end of these reasons.

[3]I have heard from both claimants, and I have heard from Mr Christopher Roydon and Mrs Kiz Roydon who are both directors of the respondent company on behalf of the respondent.

[4]There was a degree of conflict on the evidence. I have heard the witnesses give their evidence. I found the following facts proven on the balance of probabilities after considering the whole of the evidence, both oral and documentary, and after listening to the factual and legal submissions made by and on behalf of the respective parties.

[5]The respondent company is Atlantic Laundry Ltd, which is a commercial laundry business based in Wadebridge in Cornwall. The proprietors of the respondent at the relevant times were the directors Mr Christopher Roydon and Mrs Kiz Roydon from whom I have heard. The respondent had an annual turnover of approximately £500,000, and it employed seven employees. There were two supervisors, (who were the claimants), four other laundry operatives, and a part-time administrative assistant in the office. As is often the case in Cornwall, it was a largely seasonal business. The respondent had one major customer, namely Sykes Cottages, which accounted for at least 85% of the respondent’s business.

[6]The claimants are Mr Kalin Iliev and his wife Mrs Stela Ilieva, who are Bulgarian. They both commenced their employment with the respondent on 14 June 2021, and they were both employed as the two Supervisors. They were hard-working and respected employees with very good attendance records, and they effectively ran the laundry business under the supervision and ultimate control of Mr and Mrs Roydon. The vast majority of their work was taken up in completing collection, cleaning and delivery of weekly laundry orders for Sykes Cottages. The other four laundry workers were generally engaged in more straightforward duties, normally ironing, for the remainder of the respondent’s other customers.

[7]The difference in responsibilities was reflected in the salaries. Each of the claimants earned a salary of £28,500 per annum. This equated to gross weekly pay of £548.77 per week and net weekly pay of £438.92 per week. The other laundry operatives were paid at least £7,000 - £10,000 per annum gross less than the claimants who were their supervisors.

[8]Unfortunately, the respondent’s business was severely affected in early 2024 when Sykes Cottages gave the respondent two weeks’ notice to terminate its contract. This had an immediate and significant adverse effect on the respondent’s business, because as noted above this contract created some 85% of its annual turnover.

[9]The respondent’s directors realised that they needed to make immediate reductions in the respondent’s workforce. They decided to dismiss the two claimants by reason of redundancy. They took this decision because the respondent no longer needed supervisors who were almost exclusively engaged in the Sykes Cottages contract, which had been terminated. The respondent still needed the same amount of laundry operatives to complete orders for the remaining customers. The respondent’s directors took the view that there was no point offering the claimant’s a more junior operative role at a muchreduced salary because this would not have been attractive to the claimants, and in all probability would have been disruptive to the work required at a junior level by the remaining laundry operatives.

[10]On 1 March 2024 the respondent asked the claimants to attend the laundry on Monday, 4 March 2024 which was a non-working day, and a day on which they would otherwise have been on holiday. The claimants attended as requested, and Mr Roydon called him into his office and informed them that their services were no longer required and that their employment was terminated by reason of redundancy. The termination of their employment was immediate with effect from 4 March 2025. The respondent paid each of the claimant’s their relevant pay to date, their statutory and contractual notice pay, and any accrued holiday pay. They were not paid their statutory redundancy pay.

[11]There was no process of any consultation with the claimants as to their prospective redundancies. Similarly, there was no discussion of the possibility of potential alternative employment.

[12]The first claimant Mr Iliev was able to secure alternative employment within two weeks at a commensurate level of pay, save that this was slightly reduced for the first three months during a probationary period. He did not claim ant benefits. Mrs Ilieva had a long-standing medical condition and had already planned leave of absence from 18 March 2024 to return to Bulgaria to seek medical advice. Following her dismissal, she brought forward her departure and whilst in Bulgaria was admitted to hospital on 15 March 2024 and underwent emergency surgery on 18 March 2024, and made a claim for universal credit at that time. She returned to England later in April 2024. She was able to obtain alternative employment in the summer of 2024.

[13]Meanwhile, the claimants had commenced the Early Conciliation process with ACAS on 16 March 2024, and the Early Conciliation Certificate was issued on 27 April 2024. The claimants then presented these proceedings within time on 19 May 2024. They seek a declaration that they are entitled to a statutory redundancy payment, and they also claim unfair dismissal.

[14]Having established the above facts, I now apply the law.

[15]The reason for the dismissal was redundancy which is a potentially fair reason for dismissal under section 98 (2) (c) of the Employment Rights Act 1996 (“the Act”).

[16]The statutory definition of redundancy is at section 139 of the Act. This provides that an employee shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to (section 139(1)(b)) “the fact that the requirements of (the employer’s) business for employees to carry out work of a particular kind, or for employees to carry out work of a particular kind in the place where the employee was employed by the employer, have ceased or diminished or are expected to cease or diminish”

[17]I have considered section 98 (4) of the Act which provides “…. the determination of the question whether the dismissal is fair or unfair (having regard to the reason shown by the employer) –(a) depends on whether in the circumstances (including the size and administrative resources of the employer’s undertaking) the employer acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee, and –

(b) shall be determined in accordance with equity and the substantial merits of the case”.

[18]I have considered the cases of Williams & Ors v Compair Maxam Ltd

[1982] IRLR 83

; Safeway Stores v Burrell

[1997] IRLR 200

EAT; Langston v Cranfield University EAT

[1998] IRLR 172

; Osinuga v BPP University Legal Team

[2022] EAT 53

; Haycocks v ADP Pro UK Ltd

[2024] EWCA 1291

; and Polkey v A E Dayton Services Ltd

[1988] ICR 142

HL. I take these cases as guidance, and not in substitution for the provisions of the relevant statutes.

[19]Unless the parties have explicitly agreed to the contrary, the Tribunal must consider whether the respondent has reasonably consulted with the employee, adopted a fair selection process, and made reasonable efforts to find reasonable alternative employment within its organisation (see Langston). This was reaffirmed in Osinuga, which also held that the Tribunal should consider Polkey and related matters.

[20]In Haycocks, the Court of Appeal rejected the proposition (expressed by the EAT) that employers conducting smaller scale redundancies in non-unionised workplaces should, as a matter of good industrial relations practice, engage in group “general workforce consultation”. Instead, what is adequate consultation must be considered on a case-bycase basis. It could, for example, be purely individual consultation. The Court of Appeal also emphasised that consultation at a formative stage means consultation at a stage where it can make a difference to outcomes. That is not necessarily the same as early consultation. The Court of Appeal acknowledged that it was bad practice to carry out the scoring exercise before consultation started, but where there had been a conscientious investigation of the claimant’s complaints on appeal, including the opportunity to challenge his scores, the Court of Appeal held that this failure was in effect cured at the appeal stage.

[21]In my judgment the claimants were clearly dismissed by reason of redundancy and the statutory definition in section 139 of the Act is met. They are each entitled to a statutory redundancy payment. Each of the claimants was employed for two complete years over the age of 41, and their gross weekly pay was £548.77 per week. Each claimant is entitled to a statutory redundancy payment of £1,644.21 (2 x 1.5 x £548.07).

[22]In addition, in my judgment it is clear that the claimants were also unfairly dismissed. Even bearing in mind that the respondent is a small employer and that there was an immediate, unexpected and significant business difficulty, there was a complete absence of any effective consultation process. For this reason alone, in my judgment the decision by the respondent to dismiss the claimants summarily when they did so was not within the band of reasonable responses which was open to the respondents at that time. Even bearing in mind the size and administrative resources of this respondent, I find that the dismissal by the respondent of the claimants at that time in that way was not fair and reasonable in all the circumstances of the case. I find that the claimants were unfairly dismissed.

[23]That said, it is not the case that the respondent failed to undertake a process of determining whom to select for redundancy and why. It clearly made sense in the circumstances prevailing at the time to dismiss both supervisors who were largely employed in the management and delivery of the Sykes Cottages contract. That contract had been terminated, and the respondent no longer had any need for supervisors. It is true that there was no discussion with the claimants as to the possibility of alternative employment, but in effect there was none, other than demotion from the rank of supervisor in order to bump out someone in a much lower paid laundry operative role which the respondents concluded would not be attractive to the claimants, and which would be disruptive to the effective continuation of what was left of their business.

[24]The claimants do not seek re-engagement, and by way of remedy they both seek compensation for their unfair dismissals. In each case they are not entitled to a basic award for unfair dismissal in circumstances where they now have a declaration as to their entitlement to a statutory redundancy payment.

[25]I have considered and applied the case of Polkey. In my judgment it is clear that even if a fair dismissal had taken effect the claimants would have been (in that event) fairly dismissed by reason of redundancy in any event. The respondent was a small employer and, in my judgment, a reasonable consultation process could have been commenced and concluded within three weeks. It would not have been unfair or unreasonable at that stage to have dismissed both claimant supervisors given the termination of the Sykes Cottages contract. Similarly, in my judgment it cannot be said to have been unreasonable not to have offered the claimants the only possibility of alternative employment, which would have been a significant reduction in both status and salary in order to maintain their employment as laundry operatives, whilst at the same time “bumping out” other laundry operatives who were still required. For these reasons in my judgment the respondent could have reached a fair decision to dismiss both claimants in, say, a further three weeks.

[26]Each claimant is entitled to a compensatory award. In each case I make an award of £500.00 for loss of statutory rights. I also make an award of three weeks net pay of £1,316.76 (£438.92 x 3), to reflect and compensate for the lost consultation period. In each case therefore the compensatory award is in the sum of £1,816.76. Neither claimant claimed benefits during this period, and the Employment Protection (Recoupment of Jobseeker’s Allowance and Income Support) Regulations 1996 (“the Recoupment Regulations”) do not apply in this case.