Mr M David and others v DRB Group Ltd (in creditors’ voluntary liquidation) and Secretary of State for Business and Trade: 1600759/2023 and others
EMPLOYMENT TRIBUNALS
Case No 1600759/2023
Between
Mr M David and othersClaimantDRB Group Ltd (in creditors’ voluntary liquidation) and Secretary of State for Business and TradeRespondent
Before
Employment Judge S JenkinsMr A Windross (Counsel) – on behalf (instructed by 66 Claimants) for claimantNot represented for respondentDate 6 October 2023
REASONS
[1]The hearing was to consider the Claimants’ claims for protective awards, pursuant to section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“Act”), that the First Respondent had failed to comply with its duty, under section 188 of the Act, to consult appropriate representatives of the Claimants, being employees dismissed by reason of redundancy.[2]All Claimants were employed by the First Respondent up to January or February 2023, when they were dismissed by reason of redundancy, shortly prior to the First Respondent entering into creditors’ voluntary liquidation.[3]The Claimants, either individually or in groups, brought Tribunal claims against the First Respondent, joining in the Second Respondent on the basis that she would be responsible for certain payments under Part XII of the Employment Rights Act 1996.[4]The First Respondent, in liquidation, did not submit any response to the claims. The Second Respondent, the Secretary of State, provided a response on 2 June 2023, noting that the Secretary of State neither supported nor resisted the claims, but requesting that the Tribunal ensure that the Claimants were eligible to bring their claims.[5]Employment Judge Sharp, at a preliminary hearing on 14 July 2023, directed that a hearing would need to take place to consider the Claimants’ claims, with evidence being provided from two witnesses. This hearing was then arranged to consider that evidence and to decide upon the Claimant's claims. Issues and Law[6]Section 188(1) of the Act, provides as follows: “Where an employer is proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, the employer shall consult about the dismissal all the persons who are appropriate representatives of any of the employees who may be affected by the proposed dismissals or may be affected by measures taken in connection with those dismissals.”[7]A number of constituent elements therefore arise in relation to the duties under section 188 of the Act. There must be an employer, who propose to dismiss employees as redundant, and it seemed clear that, in this case, there was such an employer, the First Respondent, which proposed to dismiss, and indeed almost immediately thereafter did dismiss, employees as redundant.[8]In such circumstances, the employer is under a duty to consult about those dismissals with appropriate representatives. Section 188(1B) provides that, if there is a recognised trade union, then it will be the appropriate representative. If there is no recognised trade union, then the obligation is to consult with employee representatives appointed or elected for that purpose, or, if not elected or appointed for that purpose, having authority from the relevant employees to receive information and to be consulted about the proposed dismissals on their behalf. I therefore needed to consider whether there had been a recognised trade union or unions and, if not, whether any employee representatives had been appointed or elected or had the required authority.[9]The requirement set out in section 188 only arises where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. I therefore needed to be satisfied that that had been the case. There was no indication that the First Respondent operated at more than one location.[10]Where the duty to consult arises, section 188(1A) provides that the consultation shall begin “in good time” and, in any event, where the employer is proposing to dismiss 100 or more employees, at least 45 days, and otherwise, 30 days, before the first of the dismissals takes effect.[11]Section 188(7) of the Act allow a "special circumstances" defence to a claim of failure to consult, as it provides that, “if, in any case, there are special circumstances which render it not reasonably practicable for the employer to comply with [any of its obligations], then the employer is to take all such steps towards compliance as are reasonably practicable in those circumstances”.[12]In Clarks of Hove Ltd v Bakers’ Union [1978] ICR 1076, the Court of Appeal held that a ‘special circumstance’ must be something ‘exceptional’, ‘out of the ordinary’ or ‘uncommon’. It also pointed out that insolvency is not on its own a special circumstance. Far from being ‘exceptional’ or ‘out of the ordinary’, insolvency is in fact a fairly common occurrence.[13]Finally, if I was satisfied that the First Respondent had proposed to dismiss as redundant 20 or more employees at one or more of the establishments within a period of 90 days, I needed to be satisfied as to whether there had then been a failure to comply with the consultation obligation, and, if so, as to the extent of that failure.[14]Section 189(2) of the Act provides that if the Tribunal finds a complaint of failure to consult well-founded, it shall make a declaration to that effect, and can make a protective award. Sections 189(3) and (4) then provide that a protective award is an award ordering the employer to pay remuneration for a protected period, which begins with the date on which the first of the dismissals to which the complaint relates takes effect or the date of the award, whichever is the earlier, and is of such length as the Tribunal determines to be just and equitable in all the circumstances having regard to the seriousness of the employer's default in complying with any requirement of section 188. It cannot however exceed 90 days.[15]The Court of Appeal, in Susie Radin Ltd v GMB and ors [2004] ICR 893, provided guidance as to how a tribunal should approach the assessment of a protected period. It noted five factors that Tribunals should have in mind when applying section 189, as follows:• The purpose of the award is to provide a sanction, not compensation.• The tribunal has a wide discretion to do what it considers just and equitable, but the focus must be on the seriousness of the employer’s default.• The default may vary in seriousness from the technical to a complete failure, both to provide the required information and to consult.• The deliberateness of the failure may be relevant, as may the availability to the employer of legal advice about its obligations under S.188.• How the tribunal assesses the length of the protected period is a matter for the tribunal, but a proper approach where there has been no consultation is to start with the maximum period of 90 days and reduce it only if there are mitigating circumstances justifying a reduction to an extent to which the tribunal considers appropriate.
Findings
[16]The First Respondent was an engineering company, based in Deeside, North Wales. At the time of the events giving rise to these claims, January and February 2023, it employed approximately 150 people at on location.[17]On 30 January 2023, those employees of the First Respondent who were in work were called to a meeting and informed that they were being dismissed with immediate effect due to the First Respondent’s insolvent state. Those not in work became aware of the situation from their colleagues. No formal notices of termination were provided, but the first dismissals took place on 30 January 2023, with the last taking effect on 15 February 2023.[18]Liquidators were appointed on 20 February 2023.[19]I was satisfied from the witnesses’ evidence, that twenty or more employees, in fact approximately 150 employees, had been dismissed at the First Respondent’s premises within a 90-day period. I was also satisfied, notwithstanding that no formal notices of termination were provided, that those dismissals were by reason of redundancy, in that the dismissals were wholly attributable to the fact that the First Respondent ceased to carry on the business for which the employees had been employed.[20]The dismissals took effect between 30 January 2023 and 15 February 2023, and it appeared to me that the earliest it could be said that the proposals to dismiss by reason of redundancy occurred was on or shortly before 30 January 2023.[21]No trade union was recognised within the First Respondent’s business, and no employee representatives were appointed or elected or otherwise had authority to receive information and be consulted about any proposed dismissals.[22]In any event, no information about the proposed redundancies was provided to any representative or to the employees generally, and no consultation about the proposed redundancies took place.[23]As I have noted, the First Respondent did not submit a response to the claims, and therefore no special circumstances defence was advanced it.
Conclusions
[24]In light of my findings, it was clear to me that there had been proposals to dismiss 20 or more, indeed 100 or more, employees by reason of redundancy at the First Respondent’s only establishment. The obligation to consult under section 188 therefore arose.[25]It was also clear to me that there had been a complete failure by the First Respondent to comply with the obligations under section 188. No employee representatives were appointed or elected, nor did any representatives have authority from the relevant employees to receive information and to be consulted about the proposed dismissals on their behalf. Furthermore, no attempts were made to provide the employees with the required information or to consult with them.[26]In the circumstances, I was satisfied that it was appropriate to make a declaration that the Claimants’ claims were well founded.[27]Following the guidance provided by the Court of Appeal in Susie Radin Ltd, I then considered that it was appropriate to order that the protected period should run for 90 days. As I have noted, there was no attempt by the First Respondent to appoint or elect representatives, and no attempt to provide them with information about the proposed redundancies or to consult with them on those redundancies. I therefore saw no reason to make any reduction from the 90 day period.[28]In conclusion, I directed that the First Respondent should be ordered to pay remuneration to the relevant Claimants for the protected period, which began on the date of the first dismissals, 30 January 2023, and ran thereafter for 90 days.[29]The First Respondent needs to be aware of, and comply with, the recoupment provisions set out in Appendix 2.