Over a dozen workers who lost their jobs when Mothercare went into administration earlier this week have begun the process of taking legal action against the company amidst allegations that it failed to properly consult staff when making redundancies.
Around 2,800 staff are said to have been left unemployed on Wednesday, 6th November after the firm – which has its HQ in Watford – collapsed amidst trading difficulties.
But with many staff notified that the business had ceased trading and sent home with immediate effect, employment law team at Simpson Millar said it has already started to receive enquiries from ex-employees looking to investigate allegations that the business had failed to properly consult staff when making redundancies.
The firm has now begun investigations to enable a legal action to be brought in order to secure a Protective Award for those affected.
Stephen Pinder, an employment law Partner at Simpson Millar, said that if the business had failed in its legal obligation to undertake a ‘collective redundancy consultation’ process, staff could be entitled to compensation.
The firm has set up a Mothercare Eligibility Checker which allows employees to see whether they can claim.
He said: “It’s always a shock when a business goes into administration, and it’s a very sad time indeed for those ex-employees, especially just before Christmas, who have been in contact with our team of employment law experts.
“We’ve been receiving calls from over a dozen ex-employees, who are looking to pursue a Protective Award which, if successful, will see them compensated by up to 90 days’ gross pay, albeit likely capped at £4,200 given the company’s administrative state.
“To be entitled to this, formal legal action must be brought against Mothercare and an Employment Tribunal Judgment obtained which will rule on whether there was a failure by an employer to follow the correct procedure when making redundancies.”
Stephen went on to say that the speed at which they were contacted by staff was indicative of a ‘increased awareness’ amongst workers of their rights when it comes to the collapse of an organisation.
He said: “People tend to assume that once a business has gone bust, there’s nothing they can do.
“However, with so many large organisations entering administration, and high-profile cases such as Thomas Cook going into compulsory liquidation, there is an increased awareness amongst workers about what the correct, and indeed the incorrect, process is when making redundancies.
“Where businesses fail in their legal obligation staff do still have rights, and where an Employment Tribunal finds in the favour of the employees they will be able to access the funds via the Government Insolvency Service.”
Simpson Millar’s leading employment law team have been involved in successfully bringing legal action on behalf of former employees of multiple failed businesses affected by a failure to consult; including BHS head office staff, and others working for luxury homemade mobile phone retailer Vertu.
The law firm recently recovered payments totalling just under £300k on behalf of 103 people after an employment law tribunal found that Multiyork had failed in its legal obligation to its staff during the redundancy consultation period.