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Union launches legal action over redundancies

Napthens - October 30th 2017

In the wake of the collapse of Monarch Airlines, the Union, Unite are launching legal action on behalf of over 1,800 members of staff who were consequently laid off.

In August this year the administrators, KPMG, were called in to look at whether the company should be wound up. However, it wasn’t until 2 October 2017 that Monarch officially went into administration. As a result, Unite are seeking compensation, on behalf of the staff, for the failure to collectively consult over the potential redundancies and to follow the obligatory 45-day notice period given that more than 100 employees were affected. In total, the compensation being pursued by Unite could run into the millions of pounds. Given that Monarch is in administration, it is likely that the government will be forced to foot the bill. A similar case was brought on behalf of 1,100 former Redcar Steel workers last year and the government were landed with a £6.25m bill.

It appears that the Monarch staff were first informed that they were being made redundant when they received an email in the early hours of the morning on 2 October 2017, requesting that they join a conference call at 9am. However, the number that they were provided with was a premium-rate number and calls cost up to 50p per minute, on some mobile networks. This resulted in some staff facing large phone bills, with one pilot reportedly receiving a bill of almost £40. KPMG has since apologised and offered to refund those who incurred expenses in joining the conference call.

So what would be best practice? You must ensure that you have a genuine business case for making redundancies and follow a fair procedure in order to affect any fair dismissal by reason of redundancy. Where an employer proposes to make large scale redundancies of 20 or more employees within a period 90 days or less (collective redundancies), it must consult on its proposal with representatives of the affected employees and also notify BEIS. The collective redundancy provisions are complex and can have important commercial consequences. The maximum sanction for breaching the obligations is a “protective award” of up to 90 days’ gross actual pay for each affected employee, which can add up to a substantial amount so it is important that a business faced with this scenario takes legal advice at the outset.

Should you require further assistance, please don’t hesitate to contact a member of our team.