Ex-employees poised to take legal action over the collapse of Caledonian Modular

Staff who have lost their jobs following the collapse of Caledonian Modular are considering taking legal action for compensation after allegations that the company failed to consult with them before making redundancies.

The offsite building solution provider, Caledonian Modular, has now ceased trading and over 200 jobs are at risk.

The administration of the firm has prompted ex-staff to contact employment law firm, Morrish Solicitors, to investigate allegations that the business failed to properly consult staff when making redundancies. This could result in legal action being brought to secure compensation known as a Protective Award for those affected.

Where 20 or more employees are made redundant at one workplace, a company is under an obligation to engage in an information and consultation process, which must start at least 30 days before the first redundancies are made. It is understood that Caledonian Modular didn’t start that process either at all, or in time and staff have been made redundant without any prior warning.

Daniel Kindell, partner and head of employment rights at Morrish Solicitors,said: “Sadly we’re seeing numerous cases of insolvency leading to mass redundancies and it’s a huge shock to those affected at a very difficult and uncertain time. Unfortunately, not all payments those employees are due can be recovered from the insolvent company. We have therefore already received enquiries from those who have been affected by the news and who are looking for support and other ways of recouping what has been lost. If a protective award claim is successful, such a claim could see them compensated by up to 90 days’ gross pay, up to eight weeks of which can be recovered from the National Insurance Fund, via the government’s Insolvency Service (subject to weekly pay limits).

“Regardless of whether a company is struggling financially, it still has a duty under employment law legislation to carry out an information and consultation process to warn staff at risk of redundancies. Where that does not happen, employees can bring a claim for a protective award and secure the compensation they deserve.”

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