Comet staff win pay-out
FORMER employees of failed high street retailer Comet have won a multi-million pound pay-out after the Leeds Employment Tribunal ruled they had not been properly consulted about their redundancies.
Former Comet employees filed complaints against it relating to the retailer’s failure to consult with the 6,889 workers who were made redundant after it went into administration. The Employment Tribunal found that there had been no election of representatives, that misleading information was given to the representatives about the proposals, and that there was no consultation at all.
Hull-based Comet’s demise is one of the biggest high street casualties of recent years. The 236-store business went into administration in November 2012 after a number of restructuring attempt failed. By Christmas 2012, 99% of Comet’s 6,600 employees had been made redundant as Comet’s administrator, Deloitte closed all its stores, home delivery platforms, distribution centres, call centres and offices.
According to The Telegraph, the ruling paves the way for a potential pay-out to staff of more than £10m, which will be met by the taxpayer. Each member of staff will be entitled to a maximum of eight weeks pay worth £450 a week.
Leeds-based law firm, The Needle Partnership’s employment team, represents 275 ex-Comet employees.
Victoria Robertson, employment partner of The Needle Partnership, said: “We are very pleased with this outcome. Comet’s demise is one of the biggest High Street casualties of recent years. A corporate raid by private equity investors resulted in a 75-year old British company being destroyed and nearly 7,000 jobs being lost. Many of the ex-Comet employees have found it difficult to obtain employment elsewhere and have suffered financially. During the Tribunal case it emerged that they had been lied to, misinformed, and treated with very little dignity or respect whilst Comet’s owners extracted the maximum value from the business.”
Deloitte, the administrators, filed a report in October 2013 showing that they had been paid £5m in fees. The same report details that the retail consultants involved in store management and closures had been paid £7.2m.
Meanwhile Comet and its owners escaped any liability for paying redundancy pay and notice pay but employees were left to claim the minimum statutory amounts from the Insolvency Service (ie the tax payer). The Insolvency Service will also pay the protective awards, Robertson said.
Robertson added: “On a wider scale, this case has strong implications for employers considering making more than 20 employees redundant and underlines the principles that information must be given to employees, representatives must be elected, and consultation must involve real engagement with employees – as the Judge commented, even if suggestions from employees would be futile, an attempt should still be made to engage with employees.”
