C Turner and Others v Belmont School (Feldemore) Educational Trust Ltd (in Administration): 2301137/2024 and Others

EMPLOYMENT TRIBUNALS

Case No 2301137/2024

Between

C Turner and OthersClaimant

Belmont School (Feldemore) Educational Trust Ltd (in Administration)Respondent

Before

Employment Judge Liz Ord

Date 1 November 2024

JUDGMENT

[1]Protective Award 1.1. The Respondent failed to adequately comply with a requirement of section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A) and the Claimants’ claims for a protective award brought under section 189 of TULR(C)A succeed. 1.2. The Respondent is ordered, to pay remuneration to the Claimants named in attached Annex 1 for a protected period of 60 days beginning on 31 December 2023 (being the date on which the dismissals to which the complaints relate took effect). 1.3. The Employment Protection (Recoupment of Jobseeker’s Allowance and Income Support) Regulations 1996 apply to this award.

[2]Breach of Contract 2.1. The claims of breach of contract for non-payment of notice pay brought by the first Claimant (Ciara Turner) and the third Claimant (Penelope Gibbins) are well founded. 2.2. The Respondent is ordered to pay to the first Claimant the gross sum of £2,788.40. 2.3. The Respondent is ordered to pay to the third Claimant the gross sum of £1,966.00.

[3]Preferential debts 3.1. Subject to the normal categories of preferential debts set out in Schedule 6 of the Insolvency Act 1986, any payments made by the Respondent (rather than the Secretary of State) pursuant to this judgment will be paid as an unsecured dividend.

REASONS

[1]For the purposes of the Protective Award claims, it was agreed by the parties attending that Ciara Turner, the first Claimant, was the relevant employees’ representative for the Claimants listed in Annex 1. Therefore, hers was the lead case for the purposes of the Protective Award claims and all other such claims were dependant on her outcome. As put by the Administrator’s representative, all other Protective Award claims “piggy-backed” on that of Ms Turner. Therefore, this judgment disposes of all Claimants’ claims as listed so far as they relate to a Protective Award.

[2]The third Claimant, Penelope Gibbins, had been inadvertently omitted from the list, although there was correspondence from the Administrator agreeing to her claim being consolidated with that of the first Claimant. With the agreement of the parties, her claim was consolidated with that of the first Claimant and added to the list (a separate Case Management Order has been made to this effect). Therefore, Ms Gibbins’ claims were heard in full at this hearing. Findings of Fact (References in brackets are to page numbers in the 288 page bundle that was before the Tribunal). Protective Award

Findings of Fact

[3]There was no recognised Trade Union at the Respondent school for the purposes of collective bargaining. Nor did the school have an HR function.

[4]The Respondent was in financial difficulties throughout 2023. It was in litigation with a construction firm, who obtained a financial judgment against it in August 2023. The school expected the claim to be in the sum of around £90K. In fact the award was for £567K plus VAT. At that stage it became apparent to the Respondent that the school was potentially unable to meet its liabilities. The construction firm took steps to enforce the judgment and a hearing date was set for 31 January 2024 (202).

[5]The school board discussed whether it could re-open in September 2023. On the basis that two potential investment partners were undertaking financial due diligence and appeared to have intentions to make an offer to acquire the school, it stayed open. However, negotiations broke down and no deal was achieved (202).

[6]The Respondent did not tell its employees about the financial state it was in and the potential impact this might have on their jobs.

[7]By November 2023 it was apparent that the school was likely to close.

[8]On 30 November a letter was sent to employees from the Chair of Governors saying the school “will almost certainly be closing” (111). This was followed the same day by a letter from Marc Broughton (Head teacher) (113-4) giving context to what was happening. A Governors’ briefing was also sent out that day which, as well as setting out the problems, said that they had not given up hope of a “rescue” buyer emerging (115-17).

[9]A parent-led working group was set up to try to rescue the school and avoid closure.

[10]On 5 December, a parent, Taryn Timperlake, who had an HR and employment background, met with groups of staff and gave presentations to them about redundancy procedure, their employment rights and support on offer (slides 125-132). She sent staff an email that day (124) saying she hoped she had reassured them that they would be supported and consulted with appropriately. She said that a message regarding election of staff representatives would follow and she would produce a Q&A document for circulation.

[11]On 6 December Mr Broughton sent a letter to staff inviting them to elect representatives (135) with whom he said there would be consultation. He also said it was the Respondent’s sincere hope that the parent-led working group would be successful in saving the school.

[12]Elections of staff representatives took place between 6-8 December (159) and Ciara Turner was elected to represent teaching staff.

[13]On 11 December the Governors and Head Teacher wrote to staff saying that they were unable to keep the school open and it would close on 15 December (138).

[14]The Insolvency Service Form HR1 - Advance Notification of Redundancies was completed by the school on 1 December 2023. It indicated that the first dismissal was to take effect on 18 December and that the reason for giving less than the required 30 day notice was an inability to attract a buyer and exhaustion of financial resources. The school employed 61 staff and all were to be made redundant (120).

[15]Meetings with staff representatives were held on 13, 14 and 15 December and detailed information was provided about what was going to happen (151-154). There was no discussion on how to avoid closure.

[16]The school closed on 15 December 2023. There was no support for staff or any consultation after this date.

[17]It went into administration on 2 January 2024 and RSM UK Restructuring Advisory LLP were appointed as administrators (173-179).

[18]On 4 January the administrators wrote to employees saying their last day of service with the school was 31 December 2023 (173 – 179). Staff were paid up until this date. Breach of Contract – Notice Pay

[19]The notice period in Ciara Turner’s contract was one full term’s notice, which would have taken her pay up to 30 April 2024 (para 8 p88). Claire Whitehill and Penelope Gibbins had the same provision in their contracts. This was agreed by the Administrator’s representative.

[20]No formal notice of dismissal was given to the employees and this is acknowledged by the Respondent (27).

[21]Ms Turner and Ms Whitehill both started new jobs with effect from 1 January 2024. Ms Whitehill’s salary was more than she was earning with the Respondent. Ms Turner’s salary was less than she was earning with the Respondent.

[22]Ms Gibbins was unable to find work straight away. She obtained a fixed contract on 19 February 2024 for the remainder of the school year at a lower pay rate than she was on with the Respondent. She also obtained a small amount of substitute teacher work in January and February. She received statutory notice pay from the Insolvency Service. Conclusions Protective Award

Conclusions

[23]The Respondent acknowledged both in the written evidence and in submissions that it did not comply with its requirement to consult for the full 30 day period (64). It does not seek to rely on the special circumstances defence and concedes that the circumstances it was in did not render full consultation not reasonably practicable. Therefore, the issue for the Tribunal is how serious the default was.

[24]We have taken account of the school’s small size and its lack of an HR function.

[25]The staff were first warned of the school’s financial circumstances and potential closure on 30 November. They were provided with a detailed briefing of the School’s circumstances and, at this stage, would have understood that their jobs were at risk. However, this was not a consultation about redundancy and the briefing also spoke of hopes of saving the school.

[26]Whilst the staff were helped by another parent, Ms Timperlake, this was not tantamount to consultation.

[27]The staff were only informed definitely about the closure on 11 December, four days before the school closed. Although they were provided with detailed information and some guidance at the meetings on 13-15 December, this was extremely late in the day. In any event, consultation at these meetings was limited and no discussion took place about how redundancies might be avoided.

[28]The Respondent knew of its serious financial difficulties in August 2023. Whilst it was hoping for a buyer and to save the school, it took no steps to warn its employees of potential job losses. If it had reasonably considered its employees, it would have put them on warning of redundancies and started consultation. Instead, it left it to the last moment.

[29]For these reasons, whilst we find that some limited consultation took place, more consideration should have been given to the Respondent’s employees earlier in time. Therefore, we find it just and equitable to make an award of 60 days pay.

[30]The protective period runs from 31 December 2023. Breach of Contract – Notice Pay

[31]The Administrator’s representative does not oppose the notice pay claims from Ms Turner and Ms Gibbins. Ms Whitehill makes no claim. Therefore, taking account of the evidence before us and the Respondent’s concessions, the Tribunal finds Ms Turner’s and Ms Gibbins’ claims to be well-founded. Calculations of Notice Pay Turner

[32]The Administrator’s representative agreed the amount of notice pay set out in Ms Turner’s Schedule of Loss (273-274), which equates to one term’s gross pay minus her gross pay from her new job as follows: From 1 January 2024 to 30 April 2024 £15,115.08 - £12,326.68 = £2,788.40

[33]We therefore make an award of £2,788.40 gross Gibbins

[34]From documentation provided to the Tribunal at the hearing, the parties agreed the amount due, equating to one term’s pay minus Ms Gibbins’ pay from her substitute teacher work and her fixed term contract as follows: From 1 January 2024 to 30 April 2024 Amount due from Respondent: 655.80 (week’s gross pay) x 17 weeks (one term) = £11,148.60 gross Minus: Substitute teacher pay of £625.00 gross Fixed term contract pay from 19.2.24 to 30.4.24 of £6,772.60 Statutory notice pay of £1,785.00 Total deductions = £9,182.60 Remaining: £1,966.00 (11,148.60 – 9,182.60)

[35]We therefore make an award of £1,966.00