8 weeks pay award in test case for 750 Debenhams workers for failure to inform and consult in the WRC

The recent decision of the WRC provides useful insights and clarifications into the collective redundancy obligations for employers that arise under the Protection of Employment Act 1977 (“the 1977 Act”), which unions should be alert to when dealing with collective redundancy situations.

Background

The background to this case is well traversed when at the commencement of the Covid pandemic in 2020, Debenhams Retail (Ireland) limited announced it was closing its stores in Ireland. It became quickly apparent that in addition to the closure of the shops and a pending liquidation, that the employer would not be honouring enhanced redundancy packages for long serving staff, which resulted in extended industrial action at the Debenhams premises.

The Law

Section 9 of the Act requires an employer to consult with representatives in “good time” and at least 30 days before the issuing of notice of termination with employees’ representatives. Section 10 of the Act provides that employers must also supply representatives with “relevant information” during the consultation process, to avoid and minimise the effect of any redundancies. A breach of either section may result in an award by the WRC of 4 weeks’ pay for each affected employee.

WRC Complaint

Mandate issued proceedings against 2 respondents, Debenhams Retail (Ireland) Limited and Debenhams Retail (Ireland) Limited in Liquidation as separate respondents, alleging contravention of sections 9 and 10 of the Act, representing 4 claims on behalf of each member. This was litigated on the basis of one main test case together with the logistical feat of lodging over 750 individual claims on behalf of members in the WRC.

Key Decision

The decision represents a detailed analysis of Irish and European law reflecting the legal submissions submitted and exchanged in the course of the hearing, which found that Debenhams as the employer had failed to comply with their consultation obligations under section 9 and 10 of the Act and awarded 8 weeks’ pay for the employee, which will be applied to the 750 claims and ultimately paid out by the liquidator.

Dual Respondents – Debenhams Retail (Ireland) Limited and Debenhams Retail (Ireland) Limited in Liquidation?

The adjudicator found that the legal personality of the employer did not change when the liquidator was appointed and found that there were only 2 valid complaints against one respondent, Debenhams Retail (Ireland) Limited only.