Ms E Shaw and Others v Armstrong Teasdale Ltd (In Administration) and Armstrong Teasdale Management Ltd (In Administration): 2227159/2024 and Others
REASONS
[1]The Claimants allege a failure by the Respondents to comply with the obligations under section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).[2]The Claimants contend that the Respondents failed to consult appropriately and/or at all in relation to the proposed dismissals and they seek a protective award.[3]The Respondents’ administrators do not contest the proceedings and no defence material has been provided.The Law
[4]Section 188(1) TULRCA provides that: “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 dismissals 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”.[5]Consultation shall begin in good time and in any event:(a) where the employer is proposing to dismiss 100 or more employees as mentioned in subsection (1), at least 45 days, and(b) otherwise, at least 30 days, before the first of the dismissals takes effect (s.188(1A)).[6]Consultation must be undertaken with a view to reaching agreement and cover ways of avoiding the dismissals, reducing the numbers of employees to be dismissed, and mitigating the consequences of the dismissals, and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives (s. 188(2)).[7]Where an employer fails to comply, the Tribunal may make a protective award under section 189 TULRCA. The award is intended to be punitive rather than compensatory, and is expressed as a period of “protective award weeks” during which remuneration is payable.[8]The First Respondent was a legal practice trading from the single establishment of its office premises at Lincoln's Inn Fields, London. The Second Respondent was a company that employed the legal practice’s employees and entered into the lease for the trading premises. The Claimants were all employed by the Second Respondent and worked in the First Respondent’s Legal Practice.[9]Each Respondent was a wholly owned UK subsidiary of a US law firm operating under the brand name “Armstrong Teasdale”. The US law firm was a separate partnership entity.[10]For the purposes of this decision, it appears to have no practical consequences whether the true employer was the First or Second Respondent. Both entities are in administration with the same administrators and the payment of any protective award is likely to come from state funding. The actions, or inactions, of one company is mirrored by that of the other. If that decision needs to be made, on the limited material available there is no evidence to displace the express contractual arrangement of the Second Respondent being the employer. For the purposes of these reasons the two companies will be described as “the Respondents”, but the judgment for any protective award necessarily needs to be against a single employer and for that purpose will be made against the Second Respondent.[11]At the material times, the Respondents employed approximately 57 people, including the Claimants, in the single establishment of its office premises at Lincolns Inn Fields. There was no recognised trade union and no elected representatives.[12]It was reported in the press on 05 July 2024 that a decision had been taken to close the London office and cease trading in the UK whilst "seeking investment and other operational options”.[13]During the summer of 2024, employees, including the Claimants, were assured that the Armstrong Teasdale’s global management had their best interests at heart and that no stone would be left unturned to look after the UK employees. The Claimants were not consulted on the possibility that they would be made redundant.[14]On 12 September 2024, the employees, including the Claimants, were invited to attend a meeting with the directors and management team who informed the employees (save for a few minor exceptions, including Claimant Molly Ahmed) that they would be dismissed by reason of redundancy at close of business the following day.[15]The Claimants received an email from the Practice Director informing them of how they could apply to the government for statutory redundancy payment, outstanding holiday payment and notice pay.[16]All redundant employees were informed that “Everyone will be paid their contractual entitlements up to and including Friday 13 September”.[17]Claimant Molly Ahmed was retained for a few more days to assist the directors and management team during the period leading up to the commencement of the administration. Ms Ahmed was made redundant as at close of business on 26 September 2024.[18]Accordingly, there was a failure to comply with the obligations under section 188 TULRCA. In particular there was no consultation; there was no election or any attempt to elect appropriate representatives of the affected employees for the purposes of consultation; and there was no disclosure in writing of any of the matters set out in s.188(4) TULRCA.[19]The Tribunal therefore finds that there was a complete failure to comply with the duty under section 188 TULRCA.[20]No special circumstances have been relied upon and the Tribunal finds that non existed. The poor financial position was known in advance. There was an opportunity for consultation, but non occurred.[21]Therefore, the Tribunal makes a protective award under section 189 TULRCA for all the Claimants named in the schedule to the judgment for the maximum period of 90 days commencing on 13 September 2024 and in the case of Molly Ahemed commencing on 26 September 2024. Approved by: