Mr Darren Taylor and others v Gulliver’s Truck Hire Ltd (in administration) and Secretary of State for Business, Energy and Industrial Strategy: 2402622/2019 and others
EMPLOYMENT TRIBUNALS
Case No 2402622/2019
Between
Mr Darren Taylor and 144 othersClaimantGulliver’s Truck Hire Ltd (in administration) and Secretary of State for Business, Energy and Industrial StrategyRespondent
Before
Employment Judge HoeyDate 10 October 2019
JUDGMENT
[1]In respect of each of the claimants (who are each affected employees), with exception of Keith Miller and Zoe Croft, the Tribunal makes the following declaration:a. The first respondent was proposing to dismiss as redundant 20 or more employees at one establishment (its entire business unit) within 90 days and failed to elect employee representatives in breach of section 188A of the Trade Union and Labour Relations (Consolidation) Act 1992;b. The first respondent failed to consult about the dismissals in breach of section 188 (1A), section 188(2) and section 188(4).[2]The claimants, with exception of Keith Miller and Zoe Croft, are each entitled to a protective award against the first respondent, the protected period being 90 days from 21 December 2018, the date of the first dismissal.[3]In the event that the first respondent is insolvent, the second respondent must meet the first respondent’s liability for the protective awards, subject to section 184 of the Employment Rights Act 1996.[4]The Employment Protection (Recoupment of Benefit) Regulations 1996 applies to this award. Introduction[1]These claims arise following the demise of the first respondent. The company had a number of depots throughout the United Kingdom. It encountered financial difficulties which led to the company appointing administrators and then dismissing its staff. The vast majority of staff were summary dismissed on 21 December 2018 with some staff being retained to assist the administrators. All staff were ultimately dismissed and the business closed.[2]Some claims had been lodged in Manchester and some had been lodged in Bristol. These claims were for a protective award because of an alleged failure to arrange elections of appropriate representatives and properly collectively consult, for unfair dismissal and for other payments. Following case management, it was agreed that Manchester Employment Tribunal deal with the claims and the claims raised in Bristol were transferred. Only the claims for the failure to consult and to elect representatives were proceeding, the others having been stayed.[3]There are a total of 145 claimants. The claims had been raised against both the first respondent company and the second respondent, given the terms of Part XII of the Employment Rights Act 1996. 2 of 28[4]Given the first respondent was in administration it was necessary for the administrator’s consent to be obtained to allow the claims to proceed. This requirement is found in paragraph 43(6) of schedule B1 of the Insolvency Act 1986 (as applied by section 8). Consent was given (and written confirmation provided to the Tribunal) in respect of each of the claimants with exception of Keith Miller and Zoe Croft.[5]Ms Toner was having difficulty seeking instructions from these individuals given the circumstances arising in relation to those claimants. Those claimants’ claims had been stayed at the previous preliminary hearing to allow consent to be sought. Ms Toner had not been able to secure instructions from both claimants and the matter had not been progressed.[6]It was agreed that the Tribunal write to these claimants and state that unless they can show cause why their claims should not be dismissed, on grounds they were not actively being pursued, the claims would be dismissed if cause is not shown. Those claimant’s claims continue to be stayed meantime.[7]The parties had agreed a joint bundle of some 136 pages. Witness statements had also been produced by 24 individuals (from a cross section of depots and areas) which were taken into account. Oral evidence was given by 4 of the claimants which was subject to cross examination. The evidence provided to the Tribunal dealt with each of the issues that required to be determined (which had been identified at the case management preliminary hearing).[8]No response form had been lodged by the first respondent in respect of the individuals represented by Ms Toner. She had sought confirmation of the position from the administrator who advised her that they intended to take no part in the proceedings. The second respondent had lodged a response form (which set out the legal issues that required to be determined). At the case management preliminary hearing held on 5 July 2019, the second respondent had advised that they were content for the matter to proceed to judicial determination.[9]It is necessary to determine whether the statutory provisions have been satisfied and if not, to what remedy the claimants are entitled.[10]A response form had been lodged in respect of the claimants represented by Ms Taha. The substantive response was in 5 short sentences. The administrators stated that they understood consultation “would begin on 11 December 2018 in regard to proposed redundancies” with a large number of staff being dismissed on 21 December 2018. Issues to be determined[11]It was agreed between the parties that the following legal issues required to be determined as the claims that had been advanced were in respect of failure to elect appropriate representatives and failure to consult with affected employees contrary to section 188 and section 188A of the Trade union & Labour Relations (Consolidation) Act 1992: 3 of 28a. Did the first respondent propose to dismiss as redundant 20 or more employees at one establishment within 90 days (and when)b. Were appropriate representatives elected (given there was no relevant trade union)c. Did each of the workplaces (the depots) amount to an establishment or was the entire organisation an establishmentd. Did any consultation take placee. How much by way of a protective award should be made Findings in fact[12]Having heard oral evidence from the witnesses (covering each of the areas of the organisation) and considered each of the witness statements (which covered a cross section of the staff and areas within the first respondent), the Tribunal is able to make the following findings in fact on the balance of probabilities, namely whether the fact is more likely than not to have happened. Background[13]The first respondent operated a hire fleet of some 3800 commercial vehicles and employed around 300 people within 6 different depots with a headcount as follows:a. Bristol (the headquarters) with around 100 staffb. Cardiff with around 30 staffc. Glasgow with around 17 staffd. Heathrow with around 55 staffe. Manchester with around 50 stafff. Walsall with around 35 staffg. Exeter with around 15 staff[14]The operation was controlled and run essentially from the headquarters based in Bristol. Each of the other depots reported to Bristol. Time sheets for staff in each depot were submitted to Bristol from which pay, HR and administrative support was provided.[15]The staff within each depot would work together for example where fleet for particular customers needed to be collected or delivered, the depot closer to the customer could get involved, even if another depot had been dealing with the matter. Vehicles were shared between depots, with the Bristol office coordinating matters. The Bristol office housed the national breakdown team which would manage issues for all depots. Parts were ordered and paid for via the Bristol depot[16]The vehicles provided by the first respondent ranged from standard trucks and trailers to more specialist vehicles such as refuse collection vehicles and road sweepers. Vehicles were provided to customers under different bases, ranging from long term contract hires to short term or rolling agreements. Management decisions in relation to the business (for each depot) were made in Bristol with 4 of 28 the senior management team being based there (and decisions being circulated via lower level managers at the other depots).[17]Each of the managers reported ultimately to Bristol which dealt with IT issues (and housed the IT and email system that applied to each of the depots). Bristol also managed the first respondent’s larger clients (even where that client was based near another depot)[18]Each of the claimants had a mobility clause within their contract of employment which allowed the first respondent to “move [the employee’s] place of work to another location anywhere within the UK either on a temporary or permanent basis”. A number of claimants had been told to work in different depots and staff were required to work in other locations as required. Finance[19]The fleet was funded mainly from hire purchase funding, debt facilities, overdrafts and invoice discounting facilities to provide working capital. The first respondent’s trading position began to decline in 2016 and losses were sustained in 2017 and 2018. Cash flow was challenging and in 2017 some hire purchase funders placed a moratorium on payments.[20]On 15 November 2018 HMRC issued a demand for payment to the first respondent and confirmed it would present a winding up petition on 22 November 2018. At this point in time the first respondent had accrued VAT arrears of £2million. Specialist legal and insolvency advisers had been engaged by the first respondent for some months prior to November 2018 and the first respondent was advised to (and did) file a notice of intention to appoint administrators on 23 November 2018.[21]KPMG were engaged on 26 November 2018 to explore options and plan for administration and a further notice of intention to appoint administrators was filed on 7 December 2018 with the first respondent formally entering administration on 18 December 2018.[22]KPMG had previously been engaged on 3 separate occasions to assist the first respondent in 2017 and 2018. The administrators decided to continue to trade until 21 December 2018 to facilitate the sale of vehicles. General staff communication[23]Rumours had been circulating within the marketplace around October/November 2018 in connection with the financial position of the first respondent. When vehicles were being repossessed at the end of October 2018 the first respondent issued a memo to staff (which was issued by the Operations Director) on 7 November 2018 in the following terms: “The Board of Directors wish to address recent rumors (sic) regarding the companies (sic) trading position. 5 of 28 One of our funders have (sic) purported to terminate their HP agreements on grounds we dispute… As a result they have collected vehicles as well as contacted customers with the intention of recovering them or entering into new agreements. The Board would like to emphasize to all stakeholders that despite recent events, business will and is, continuing as usual and we would request that this communication is kept confidential within the company. Thank you for your support and hard work over recent weeks especially as we enter the busy Christmas period. We are fully focussed on driving the business forward and excited for the opportunities 2019 are set to bring.”[24]Issues were arising in practice with regard to cash flow with suppliers seeking payment and accounts being stopped. Rumours in the marketplace intensified and staff were uncertain what was happening given the apparent conflict from management (which suggested there were no concerns).[25]On 27 November 2018 the Managing Director issued a memo which was intended to be given to all staff, which the majority of staff received. The memo said: “You will all be aware that the company has been facing difficult trading conditions in the past few months. The Directors have been actively seeking a new buyer for the business and whilst a number of interested parties have been identified the company has been unable to secure the continued support of a small number of key creditors to allow sufficient time to progress that interest. As a result the directors have had little option but to file a notice of intention to appoint administrators at court. This will provide short term protection against creditor action prior to the appointment of administrators. In this period we are doing all we can to ensure the impact on customers and suppliers is minimal and the company continues to trade as usual. The company will be operating within constrained cashflow in the lead up to administration. A key part of that continued trading is the continued support and hard work of you, the employees. We fully appreciate that this news is unsettling and you will all be concerned about the security of your employment. If appointed, the proposed administrators have already indicated that they intend to continue to trade the business at least for a short period to try and secure the future of the business and its workforce. The prospect of finding a buyer is likely to be much greater with a stable workforce and I would ask for your continued support during this time. 6 of 28 Inevitably the process will result in changes being made to the business, which may have a direct impact on some employees, which may include some redundancies, but all those affected will be consulted with directly. In a worst case scenario, should a sale of the business not be achieved, we may be in a situation where we have to close down operations completely, which would of course result in loss of employment. We expect a long term solution will be secured within the next 4-8 weeks and would appreciate your continued support during this difficult time for all involved. We will of course endeavour to keep you informed as the process progressed but should you have any questions in the meantime please contact your line or depot manager.[26]On 6 December 2018 the Managing Director issued a further communication for all staff, which the majority received. It stated: “As you know we have been working with our professional advisers and other stakeholders to find a buyer for the business and secure the longer term future of the business and its workforce. We are pleased to report that we have received offers from a number of parties and we are hoping to progress a transaction or transactions with one or more of these parties over the course of the next 7 days Whilst there is still some way to go, this news is positive and your continued support is appreciated and essential in securing the survival of the business. At present because we are considering the offers which have been made it other stakeholders, we are unable to give any definitive view on what changes will be made to the business and whether this will include some redundancies, and if so how many. We hope to be in a position to clarify this over the course of the next 7 days. All those affected will be consulted with directly. We wanted to reassure all the workforce during the run up to Christmas that we are continuing to trade albeit under constrained cash flow conditions and that payroll will be met while we continue to secure a deal with a buyer during this period.” Consultation[27]On 11 December 2018 the Operations Director sent an email to the Bristol depot manager, Cardiff depot manager, Exeter depot manager, Heathrow depot manager, Manchester manager and one other person (who may have been the Walsall depot manager). The email was also copied to the Finance Director and Managing Director. 7 of 28[28]The email attached text for another general staff communication. The Operations Directors asked the recipients to print it off and “circulate” it within the “teams”.[29]The email states that “Amrat (the Finance Director) will send you a list of your colleagues for them to sign to say that they are happy for you to be their representative. Any questions that you have personally or through your teams please don’t hesitate to get in contact with myself Amrat or Philippe [the Managing Director]”.[30]The general staff communication which was dated 11 December 2018 and was to be issued to staff (and was read/issued to most staff) stated: “You are all aware of the current situation and the efforts the Directors have been making to secure a buyer for all or part of the operation. Regrettably following discussions over the weekend it is now clear that a sale of all or the majority of the business is not going to be possible. We continue to explore sales of part of the business with a number of buyers but these are limited in scope and subject to negotiation. The result is that at the time of making this announcement there is no immediate prospect of such a sale being confirmed. Accordingly the Directors are now in the very sad position of having to plan for the closure of the business. We have worked very hard to avoid this situation and continue to do so but in the absence of an immediate prospect for sale, we need to plan for the worst case scenario and act accordingly. As we indicated previously if a sale of the business could not be achieved we would be in a situation where we would have to close down operations completely which would of course result in loss of employment across the board. As such I wanted to let you all know that the company has today filed an HR1 form – this is the form that is required to be filed on behalf of the company when collective redundancies are being proposed. This means that the workforce as a whole is now technically at risk of redundancy and we will be commencing consultation with the workforce regarding this very shortly. I must reiterate that we are continuing to look for and explore sale opportunities but until these are at the stage of being confirmed we have to assume the worst case of a complete closure. We have not and will not stop exploring all opportunities to retain our staff where possible. However, our current plan is that administrators will be appointed as soon as possible and we will notify you as soon as this is affected (sic). 8 of 28 I do want to take the opportunity to thank you as a whole for your resilience in this difficult situation and for your continued hard work for the company. While I am sure the news will cause some employees to consider leaving the business I can only express the position that the prospects of an onward sale of all or part of the operation is greatly increased if the workforce continues in post. I do however appreciate that the prospect of redundancy and the closure of the business may mean you have to make decisions for you and your families. I thank you again for your work to date.”[31]The sheet that accompanied the announcement that was sent to the managers was headed “Consultation process 11 December 2018” and had relevant staff names with a box for signature (which stated at the top “Signature Agreeing to be Representative”).[32]The Tribunal only saw one of these forms (for the Cardiff depot) and it is not clear whether or not forms were issued for all depots. The form had a space for “Appointed Representative” and then a colon. It is assumed the first respondent had intended the relevant person (whom the company had chosen to be the “representative”) to be entered into the sheet. It was not done in the sheet presented to the Tribunal. In that sheet, for Cardiff, each of the 27 names had a signature next to the name.[33]The Tribunal was told that a similar process had been undertaken for Bristol and it appeared to have been followed in Exeter but there was no evidence to suggest the process had been followed in the other depots.[34]The evidence from staff at each of the depots (including those who had signed the sheet) was that there was no consultation. Even where the sheet had been issued, there was no opportunity either to elect a representative or to engage in any consultation. There was no discussion about the redundancy situation.[35]Ms Taha who was the marketing manager was told she was to be the “representative” for sales and marketing although she was not told what she was to do or what was to happen, other than being “appointed” a representative.[36]On 12 December 2018 (at 1748) the Exeter Depot Manager sent a 16 bullet point email with questions the Manager had to the Operations Director (in reply to the email of 11 December 2018). Answers were provided at 0758 on 13 December 2018.[37]The email was sent to the Exeter depot manager and copied to the Finance Director, the Managing Director, the Sales Director and one other. The Sales Director sent it to Ms Taha on 13 December at 0932 saying “can you distribute this to you ‘team’ please”.[38]The questions and answers included: 9 of 28a. Are employees to consider themselves officially in consultation for redundancy: yesb. What timescale exists for that consultation: If and when they are made redundant by the administrators.c. Will there be a process for redundancy: A matter for the administrator.d. How is redundancy calculated: Go to the government website.[39]The focus in the email was to the practical effects of redundancy and dismissal. There was no attempt to consult with staff as to the position even although reference was made to consultation. The email focused on practical issues arising because of the decisions to dismiss staff as redundant rather than an attempt to consult in relation to the situation that had arisen. This was a response to the decision to dismiss rather than an attempt to avoid it. There was no attempt given to the individuals to seek their view or be involved in the process in any meaningful way.[40]This email was not widely circulated. Ms Taha had seen it as had Ms Murray (Depot manager from Cardiff). Ms Murray noted that there were no meetings or substantive discussion nor were they told what they were to do in relation to staff or the redundancy consultation process.[41]The evidence presented to the Tribunal from the sample of claimants was overwhelmingly clear. Most staff had received the staff communications and announcements, which had suggested a positive outcome in November (despite what the rumours were suggesting). There was no attempt to elect a representative, consult with staff or seek their (or their representative’s) view. The communication that told staff that closure was imminent came as a surprise to most staff given what they had been told by management.[42]There was no attempt by the first respondent to allow staff to elect representatives. Those who had been “nominated” were not necessarily those who would have been elected. Some of those chosen were Directors, one of whom was the Managing Director’s relative. The individuals referred to by the first respondent were the first respondent’s choice with no input from staff.[43]No formal communication was given to affected staff as to what the purpose of this was or what specifically was to happen. Staff signed the sheet simply because they were asked to but did not have an understanding as to what the process was. They were fearful of losing their jobs which was compounded by the fact this happened just before Christmas. The individuals who signed the paper who gave evidence noted that they signed the sheet and “nothing else happened”. Ms Taha also explained that she did not know what was happening nor what she was to do. The individuals did not engage with the staff, the vast majority of whom had no idea what was happening as to the redundancy position or the alleged “consultation” to which reference had been made. 10 of 28[44]There was no evidence of any other discussion or engagement with staff between the communication of 13 December 2018 until 18 December 2018.[45]On 18 December 2018 the administrators entered the premises of the first respondent and advised staff that the first respondent had gone into administration. They advised that they would continue trading. Not all staff were advised as to the administration given a number of staff were “on the road” and one of the claimants was on maternity leave (who did not receive any communication and was told of her summary dismissal by telephone).[46]On 20 December 2018 a meeting took place with the administrator. The minute of this meeting is headed “meeting with employee reps”. Present at the meeting was the administrator, the Finance Director, the Operations Director, Ms Taha (who was said to represent “sales”), an HR assistant and an individual said to represent “Fleet”.[47]The minute of this meeting states that “the meeting was called to give reps an update since the appointment of the administrators on 18 December 2018”. None of the claimants employed in Bristol was given this minute nor informed of the issues it contained. It was not a consultation meeting but instead a meeting to provide information as to the effects of the decision to dismiss.[48]The minute contains 7 bullet points which is said to be “questions asked by reps”. The questions related to company cars, pension payments, bonus, notice pay and holidays.[49]The minute states that “the reps were advised that an employee meeting at the Bristol depot will be held on Friday 21 December at 130pm. Separate meetings will be held for Branch Managers and staff at depots also on Friday 21 December”. The meeting notes that the administrator stated that at that meeting staff would be told whether they are being made redundant or will be asked to remain to assist the administrators.[50]There was no suggestion during that meeting (or previously) that consultation was taking place as to ways to avoid dismissals, reducing the number to be dismissed or to mitigate the consequences of dismissal. At no stage was there any consultation with staff (or representatives) in relation to these matters.[51]At around 1330 on 21 December 2018 the administrators attended each depot. Those staff who the administrators wished to retain beyond 21 December 2018 were advised in advance and told not to attend the meeting. The remaining staff, who were on site at the depots, were told of the following announcement by the administrators: “Following the appointment of the administrators on 18 December, the company ceased to trade today. Consequently most roles are now no longer required and it is now necessary to advise employees that redundancies have to be made. A small number of employees will be retained to assist the administrators in realising the remaining assets of 11 of 28 the company however your position is redundant with effect from today 21 December.”[52]The announcement then stated that certain sums could be claimed from the redundancy payments office and that company property was to be returned.[53]Staff who were not present on site received a telephone call informing them of their summary dismissal.[54]The vast majority of staff were dismissed on 21 December 2018 with some being retained, the latest date of dismissal being 29 March 2019. The law[55]Section 188 (1) of Trade Union and Labour Relations (Consolidation) Act 1992 states: 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.[56]Section 188 (1A) states: The 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, and (b) otherwise, at least 30 days, before the first of the dismissals takes effect...[57]Section 188(2) provides: (2) The consultation shall include consultation about ways of—(a) avoiding the dismissals,(b) reducing the numbers of employees to be dismissed, and(c) mitigating the consequences of the dismissals, and shall be undertaken by the employer with a view to reaching agreement with the appropriate representatives… 4(a) the reasons for his proposals, (b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant, (c) the total number of employees of any such description employed by the employer at the establishment in question,(d) the proposed method of selecting the employees who may be dismissed,(e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect. 12 of 28(f) the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed.(g) the number of agency workers working temporarily for and under the supervision and direction of the employer,(h) the parts of the employer’s undertaking in which those agency workers are working, and(i) the type of work those agency workers are carrying out.[58]Section 188(4) provides that various information is provided to employees (or representatives) in writing including:(a) the reasons for his proposals,(b) the numbers and descriptions of employees whom it is proposed to dismiss as redundant,(c) the total number of employees of any such description employed by the employer at the establishment in question,(d) the proposed method of selecting the employees who may be dismissed,(e) the proposed method of carrying out the dismissals, with due regard to any agreed procedure, including the period over which the dismissals are to take effect.(f) the proposed method of calculating the amount of any redundancy payments to be made (otherwise than in compliance with an obligation imposed by or by virtue of any enactment) to employees who may be dismissed.(g) the number of agency workers working temporarily for and under the supervision and direction of the employer,(h) the parts of the employer’s undertaking in which those agency workers are working, and(i) the type of work those agency workers are carrying out.[59]Section 188A provides for the election of representatives as follows: (1) The requirements for the election of employee representatives under section 188(1B)(b)(ii) are that– (a) the employer shall make such arrangements as are reasonably practical to ensure that the election is fair; (b) the employer shall determine the number of representatives to be elected so that there are sufficient representatives to represent the interests of all the affected employees having regard to the number and classes of those employees; (c) the employer shall determine whether the affected employees should be represented either by representatives of all the affected employees or by representatives of particular classes of those employees; (d) before the election the employer shall determine the term of office as employee representatives so that it is of sufficient length to enable 13 of 28 information to be given and consultations under section 188 to be completed; (e) the candidates for election as employee representatives are affected employees on the date of the election; (f) no affected employee is unreasonably excluded from standing for election; (g) all affected employees on the date of the election are entitled to vote for employee representatives; (h) the employees entitled to vote may vote for as many candidates as there are representatives to be elected to represent them or, if there are to be representatives for particular classes of employees, may vote for as many candidates as there are representatives to be elected to represent their particular class of employee; (i) the election is conducted so as to secure that– (i) so far as is reasonably practicable, those voting do so in secret, and, (ii) the votes given at the election are accurately counted.[60]Section 189(1) provides: Where an employer has failed to comply with a requirement of section 188 or section 188A, a complaint may be presented to an employment tribunal on that ground–(a) in the case of a failure relating to the election of employee representatives, by any of the affected employees or by any of the employees who have been dismissed as redundant;(b) in the case of any other failure relating to employee representatives, by any of the employee representatives to whom the failure related,(c) in the case of failure relating to representatives of a trade union, by the trade union, and(d) in any other case, by any of the affected employees or by any of the employees who have been dismissed as redundant.[61]Any protective period should commence on the first day of the dismissals in terms of section 189(4): (4) The protected period—(a) 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(b) 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; but shall not exceed 90 days.[62]Peter Gibson LJ in the Court of Appeal in Susie Radin Ltd v GMB and others [2004] IRLR 400 CA (paragraph 45) said: 14 of 28 “I suggest that ETs, in deciding in the exercise of their discretion whether to make a protective award and for what period, should have the following matters in mind:(1) The purpose of the award is to provide a sanction for breach by the employer of the obligations in s. 188: it is not to compensate the employees for loss which they have suffered in consequence of the breach.(2) The ET have a wide discretion to do what is just and equitable in all the circumstances, but the focus should be on the seriousness of the employer's default.(3) The default may vary in seriousness from the technical to a complete failure to provide any of the required information and to consult.(4) The deliberateness of the failure may be relevant, as may the availability to the employer of legal advice about his obligations under s. 188.(5) How the ET assesses the length of the protected period is a matter for the ET, but a proper approach in a case where there has been no consultation is to start with the maximum period and reduce it only if there are mitigating circumstances justifying a reduction to an extent which the ET consider appropriate.” Discussion and reasons[63]Following conclusion of the evidence, Ms Toner presented written submissions to which she spoke (which were adopted by the remaining claimants, the same principles being applicable). I shall deal with each of the issues and the submissions in turn. Did the first respondent propose to dismiss as redundant the claimants?[64]It was not in dispute that the reason for the claimants’ dismissals was due to the company’s financial position and then ceasing to trade, which for a reason not related to the individuals. The claimants were dismissed as redundant (for the purposes of the Trade Union and Labour Relations (Consolidation) Act 1992 (“the Act”). When did the first respondent propose this?[65]It is necessary to consider the point in time at which the first respondent proposed to dismiss. Ms Toner was unable to say precisely when this took place without any evidence being presented by the first respondent. She argued that at the latest the first respondent was proposing to dismiss within a 90 day period from 23 November 2018 when the notice of intention to appoint administrators was filed.[66]She argued that the obligation could well have been triggered a lot sooner given the perilous financial state of the company. 15 of 28[67]The only evidence that was before the Tribunal on this point was the communication from the first respondent and the claimants’ statements. The initial statements are positive and suggest negotiations are in place and dismissals are not being proposed. On 7 November 2018 the memo talks of “business as usual”. The communication on 27 November 2018 suggests that if a buyer is found that “may” include some redundancies and if no sale is achieved that would result in loss of employment.[68]“Proposing” to dismiss requires the employer to have formulated a specific proposal or intention to dismiss. It is a question of fact to determine from the evidence when the employer reached a stage in the circumstances that dismissals were being proposed. “Proposing” does not require a decision to dismiss as such but a possibility that they might occur.[69]I find from the facts that the employer proposed to dismiss by 27 November 2018. I must make my decision from the evidence presented. I accept that the first respondent has not given evidence as such and that many of the claims are undefended but I must make a decision from the evidence presented to the Tribunal on the balance of probabilities.[70]The communication of 27 November 2018 suggests a buyer might be found and “some” redundancies may be needed. By this stage the notice of intention to appoint administrators had been filed and clearly the first respondent had considered matters and decided that there was a risk of dismissals having to be made. Filing the relevant notice does not necessarily result in closure (and is intended to save the business and avoid dismissals). By 27 November 2018 the first respondent had already lost around 25% of its fleet (since 1000 of 3800 vehicles had been removed). It was clear that HP funders had ceased to support the company.[71]Given what the communication of 27 November 2018 says and given the surrounding factual matrix and financial position of the company, I find that the first respondent was proposing to dismiss as redundant 20 or more staff by 27 November 2018 (at the latest). Did the workplaces amount to an establishment separately or collectively?[72]I need to determine whether or not the individual depots were establishments or whether (as Ms Toner argued) the entire business unit (comprising each of the depots together) was an establishment.[73]Ms Toner took the Tribunal through the European and domestic authorities in this area. This included USDAW v Ethel Austin Ltd [2013] IRLR 686, Rockfon A/S v Specialarbejderforbundet i Danmark [1996] IRLR 168, and Athinaiki [2007] IRLR 284. A purposive interpretation has to be given to the word “establishment”.[74]An “establishment” requires to have a degree of permanence and stability. Stock was controlled via the Bristol depot which also coordinated the other 16 of 28 depots, in terms of dealing with vehicles, customers and also administration, payroll and HR/IT and infrastructure and support. Bristol was the heart of the operation with the local depots being inextricably and necessarily linked.[75]Each of the depots was subject to management decisions made at head office. In this regard there is a similarity with the Fairhurst case to which Ms Toner referred which found that as the claimants were all subject to management decisions emanating from head office, the entire business unit (including the local offices) amounted to a single establishment.[76]The authorities show that the focus is on the functional and organisational characteristics and whether the alleged establishment constitutes a unit. The individual depots were not themselves establishments given the facts. The “establishment” for the purposes of the law in this area was the unit comprising the collective of each depot.[77]I am satisfied that from the facts presented to the Tribunal, the business as a unit (namely the combined effect of each of the depots) was the establishment for the purposes of collective consultation. It was clear that the local depots, such as Exeter and Glasgow, were essentially local outposts of the Bristol depot. Both depots were entirely reliant upon the Bristol depot to function. They were not standalone units and could not function independently. The business worked because Bristol controlled and ran the operation which was then carried out by the local depots.[78]From the facts I am therefore satisfied that the first respondent proposed to dismiss as redundant, 20 or more employees within 90 days at the same establishment and as such the collective consultation obligations applied to the first respondent – and all those employed by it (including each of the claimants, who were necessarily affected employees). Were representatives elected[79]There were no elections carried out nor was there a recognised trade union in place. The email of 11 December 2018 shows that the first respondent decided to appoint individuals chosen by the Directors. Affected staff were not given the opportunity to elect a person of their choice nor were they given any information as to what a representative was (or what they were to do). Further, the persons who were themselves “appointed” were given no information at all to support them. There was no election of representatives and the obligation in terms of the Act was not fulfilled.[80]Given there was no relevant trade union and election of representatives, there was no consultation with appropriate representatives and so the first respondent breached section 188(1) of the Act.[81]I have taken into account the fact the first respondent decided to appoint specific individuals. However, there was no communication with staff as to what this was, nor any communication to those who were appointed as to their role. Given the circumstances facing the claimants it is not surprising they signed the 17 of 28 sheet in connection with an alleged representative but still did not understand what the process was nor what was to happen.[82]A number of the witnesses stated that had they been given the opportunity the person who had been selected would not have been their choice. The individuals nominated appeared to be senior staff and the Operations Director was related to the Managing Director. These nominees did not “represent” the relevant staff since the staff were not told what the role was or what was to happen.[83]The importance of the election of appropriate representatives and the avoiding of “rigging” with “favoured “yes men”” was noted by Luba J in Philips v Xtera UKEAT/244/10 (see paragraph 31). This is not simply a technical requirement but a fundamental principle to elect persons with whom the employer consults about the redundancy situation. The failure in the instant case was of the utmost seriousness. What, if any, consultation took place[84]In order to comply with the law in this area consultation requires to begin in good time. Moreover consultation must not be a sham but allow time and space for proper consideration to be given to the issues facing the individuals.[85]As Ms Toner said, fair consultation involves giving the representatives a fair and proper opportunity to understand fully what is being consulted about and to openly and genuinely take on board their comments. The consultation process cannot begin until the information required by section 188 has been issued. The consultation should include ways of avoiding dismissals, reducing the number affected and mitigating the consequences of dismissal all with a view to reaching agreement with the appropriate representatives. None of this took place.[86]The response form lodged by the first respondent in respect of some of the claims stated that consultation began on 11 December 2018 with regard to proposed redundancies and that because of the financial position of the company a large number of employees were dismissed as redundant on 21 December 2018.[87]The information being presented by the first respondent to staff up to 11 December 2018 was positive. I accept Ms Toner’s submission that by 11 December 2018 the position was no longer at a formative stage and as such the claimants were not given the opportunity to fully understand matters, express a view or even seek to influence or avoid closure.[88]There was no attempt to seek to avoid dismissals reduce the number affected or mitigate the consequences. As Ms Toner states the staff communications of 7 and 27 November 2018 and 6 December 2018 expressed confidence in the future rather than focusing on the potential impact upon staff or on ways to minimise the impact redundancy could have. The communication of 27 November notes the intention to seek a buyer but no mention is made of the 18 of 28 statutory demand by HMRC given the £2 million VAT debt and the risk of winding up. As Ms Toner pointed out the first respondent did have professional advisers on board at the relevant time.[89]I have considered the meeting that took place on 20 December 2018 and the email communication. There was no evidence that this was communicated to staff generally or that there was genuine consultation in connection with the process. There was no engagement as to ways to avoid dismissal. The meeting and discussion that took place and the “appointment” of representatives was about communicating the consequences of the decision rather than consulting with representatives when the input could have been meaningful.[90]There was no consultation with appropriate representatives as required by law. Those who were appointed were not authorised by the staff in question and there is no evidence that there was meaningful consultation with the affected staff.[91]Ms Toner argued that the first respondent had decided to close the company at the point it decided to progress the discussions. There was a lack of coordination and not everyone received the communications. Consultation should have commenced 45 days before the dismissals were to take effect and in any event in good time. This did not happen. There was in fact no consultation. The decision to close the company had in reality already taken place. It was clear that the plans were not at a formative stage. I accept that submission.[92]KPMG had been engaged in 2017 and 2018 and by 23 November the 1st notice of intention to appoint administrators had been submitted because of the HMRC debt.[93]Ms Toner argued that dismissals could have been avoided had the statutory provisions been followed. It is possible that proposals could have been made or at least the effect of dismissals could have been mitigated.[94]Ms Toner points out that while it was suggested on 18 December 2018 that there was still a hope the business could be sold and dismissals avoided, the administrator’s report suggests the only reason business continued to trade was to secure sales and realise assets. There was no attempt to engage in any proper consultation with affected employees. That is a sound submission. There was no consultation with affected staff as required by the Act.[95]The Tribunal is therefore satisfied that the first respondent failed to arrange for election of appropriate representatives and failed to properly consult in respect of the redundancies it was proposing to make. What award should be made[96]Section 189(4) states that the protective period begins on the first date of dismissal it is such length as is just and equitable in all the circumstances 19 of 28 having regard to the seriousness of the employer’s default in complying with section 188 and shall not exceed 90 days.[97]Susie Radin 2004 IRLR 400 notes that the purpose of the award is to provide a sanction for breach of the law, rather than compensating for loss sustained. The focus must be on the seriousness of the employer’s default.[98]The Tribunal takes account of the fact that the first respondent did have the benefit of professional advisers during this process. This is not a technical failure. The evidence shows that there was an overwhelming failure to properly consult with the claimants at all. I require to consider what is just and equitable and do so by applying the dicta of Gibson LJ in Susie Radin supra.[99]There was no election of representatives and no consultation. Any discussions that took place was after the decision had in essence been taken. There was no attempt to avoid reduce or mitigate the effects of dismissal. The requisite information set out in section 188(4) was not provided.[100]I accept Ms Toner’s argument that there could be no suggestion of a special circumstances defence given the financial background and information known to the first respondent. While there is always uncertainty as to funding and the commercial reality, the obligations in this area exist to ensure representatives are involved in the process in good time. The financial situation of the first respondent was known for many months. There was no meaningful consultation with appropriate representatives nor in fact any consultation prior to the decision being made at all. The discussions that took place and information provided were in relation to the effect of the dismissal rather than in relation to avoiding or mitigating it.[101]I find that 90 days protected period is just and equitable in all the circumstances by way of the protective award in respect of the affected staff, namely those employed by the first respondent. The protected period runs from the date the first dismissal took effect, namely 21 December 2018. Summary[102]Keith Miller and Zoe Croft are to show cause why their claims should not be struck out on the basis that they are not actively pursuing their claims.[103]The remaining claimants are affected employees given the fact they were dismissed by reason of redundancy and the Tribunal makes a declaration that the first respondent was proposing to dismiss as redundant 20 or more employees at one establishment within 90 days and failed to elect employee representatives in beach of section 188A of the Trade Union and labour Relations (Consolidation) Act 1992 and that the first respondent failed to consult about the dismissals in breach of section 188 (1A), section 188(2) and section 188(4). 20 of 28[104]The claimants, with exception of Keith Miller and Zoe Croft, are each entitled to a protective award against the first respondent, the protected period being 90 days from the date of the first dismissal, 21 December 2018.[105]In the event that the first respondent is insolvent, the second respondent must meet the first respondent’s liability for the protective awards, subject to section 184 of the Employment Rights Act 1996[106]The Employment Protection (Recoupment of Benefit) Regulations 1996 applies to this award. The parties’ attention is directed to Regulation 6 of the Employment Protection (Recoupment of Benefits) Regulations 1996 which requires the first respondent to provide information to the Secretary of State in respect of the claimants to whom the award relates (within 10 days). The parties’ attention is also drawn to regulations 7 and 8 which postpone relevant awards to enable the Secretary of State to initiate recoupment.