Debenhams liquidators lose second test case at WRC over compulsory redundancies

The liquidators of Debenhams have lost a second test over the mass compulsory redundancy of nearly 1,000 staff there 3½ years ago.

A test case taken on behalf of a group of Siptu members at the shuttered retailer has concluded with an order for just over four weeks’ pay to a catering assistant for breaches of her collective redundancy consultation rights when she lost her job at the department store chain in April 2020.

The latest ruling comes with millions of euro at stake in a Labour Court appeal next month against the Workplace Relations Commission’s (WRC) earlier finding on the same grounds in favour of up to 800 members of the Mandate trade union.

[ 406 Days: The Debenhams Picket Line – A moving chronicle of the longest dispute in Irish labour history ]

[ No ‘master plan’ to cut jobs at Debenhams before credit line ‘cut off’ ]

The Siptu test case is understood to affect a smaller group of staff, fewer than 50.

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Lawyers acting for joint Debenhams liquidators Kieran Wallace and Andrew O’Leary, formerly of KPMG, denied breaches of the Protection of Employment Act 1977, as amended by European Communities (Protection of Employment) Regulations 2000 at hearings in the separate matters late last year and this spring.

In his decision on catering assistant Breda Cox’s case, and on the earlier test case on behalf of Mandate members, WRC adjudicator Brian Dalton has found that the workers’ trade unions were entitled to seek information on the value of the stock, who owned it and figures on the profitability of each store.

These were “all relevant factors to formulating constructive proposals”, Mr Dalton wrote, and the failure to provide it “frustrated” the capacity of the trade unions to make “constructive proposals” on avoiding the mass redundancies or mitigating their impact.

Mr Dalton also found that the company was late in starting the redundancy consultation process – as it had only done so 3½ weeks after an emergency board meeting on March 24th, 2020, when liquidation was on the table.

By the time the consultations started on April 17th that year, the parent company had cut off financial support and the liquidators had been appointed – “reducing the scope of the consultation to liquidation alone”.

The adjudicator ruled that the consultation process “was required to commence earlier than it did” and “was not conducted in a meaningful way” as relevant information was not supplied.

[ Debenhams redundancies ‘predetermined’, union official claims ]

[ Elverys tycoon leads investors in €12m purchase of Cork’s former Debenhams shop ]

Mr Dalton found there had been one breach of the legislation in respect of the consultation provisions and a further breach for the failure to provide relevant information to the trade union.

Although he had awarded the maximum of four weeks’ pay for each breach in the Mandate test case, Mr Dalton said the case for the maximum award “has not been made out” in the Siptu claim.

Referencing Ms Cox’s weekly wage of €445, Mr Dalton awarded €900 for each of the two breaches, for a total of €1,800.

He had awarded four weeks’ pay for each of the two breaches in the Mandate test case, taken by former Henry Street shop steward Jane Crowe, awarding her €2,280 in total.

The liquidators’ appeal to that ruling is to be heard by the Labour Court on November 1st.