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GMB v HJ Berry & Sons Ltd

When a Company is proposing to make 30 or more people redundant from one particular workplace, there are strict regulations in place that say the Company must enter into at least 30 days consolation with the workforce, or a trade union if one is recognised. The purpose of the consultation is to try and find alternatives to redundancy if possible and to keep people fully updated about the possibility of job losses and how they will come about.

We acted for the GMB in a case against HJ Berrys & Sons Ltd, a Company based in Chipping, Lancashire. The Company manufactured furniture and had been in financial trouble for some time. They had been featured in a Channel 4 documentary in 2009 when they were offered a £1m rescue package by renowned businessman Sir Gerry Robinson that they rejected. In February 2010 the Company announced that they had gone into administration and as a result the factory had to close immediately with the loss of over 80 jobs.

We issued proceedings against the Company and they were defended by the administrators. At a recent hearing at the Manchester Tribunal, the administrators tried to argue that because the Union knew the Company were in financial trouble and had informed them of that fact, this amounted to consultation about the redundancies. The Union disagreed strongly arguing that the consolation requirements are clearly set out in the relevant legislation and there was no semblance of compliance with those requirements.

The Tribunal agreed with the Union and awarded every employee dismissed as redundant 90 days pay, the maximum they could award. This case illustrates the importance of complying with the consolation requirements and the fact that the Company had gone into administration was irrelevant. Whilst the administration means it is unlikely the ex-employees will receive the full amount owed, the Government's Redundancy Payments Office will pay for 56 of the 90 days owed. The remainder will be paid after the Company's remaining assests have been liquidated, and the administrator admitted during the course of the hearing that he expected the overall cost to the Company to be in the region of £400,000.