Deloitte and the Comet redundancy debacle. When is a plan not a plan?
An Employment Tribunal has found that Comet failed to consult adequately with staff before redundancies were made. That will be water off Deloittes back, as the £25m cost of the consequent protective award falls on the government. But the comments of the Judge and subsequent media furore must give the administrators cause for concern.
Employment Judge Forrest found that even basic information about the closure of particular stores was not provided to the employees and that they were dismissed with a complete lack of information about the process. As a result a substantial number of the 7,000 former employees will be eligible for up to another 90 days’ pay. The tribunal still needs to rule on exactly how many, and it remains to be seen what will happen – particularly to the claims of about 4,000 who did not claim within the usual time limit.
The media storm is led by the Guardian, which reports “Deloitte could face prosecution over Comet redundancies.” They are repeating claims from the legal firm representing the sacked workers, which is perhaps not the most impartial of sources.
That said, it must be embarrassing for Deloittes for it to be reported that administrator Chris Farringdon was signing a letter to the secretary of state, Vince Cable, saying there were “no proposed redundancies at present” at the same time as the Employment Tribunal found they were being “actively considered”.
It is always difficult for administrators – thrown into this situation often with very little warning. Technically the administrator signs the notification form telling the business secretary of the proposals, but it is the company that makes the redundancies – so whose plan is it anyway?
The Guardian reports that the Insolvency Service is handing the investigation into this matter and it is for them to consider reporting the administrators’ alleged failure to notify (in breach of s194 of the Trade Union and Labour Relations (Consolidation) Act 1992) to either the police or the administrators governing body the ICAEW. Deloitte declined to comment on the possible complaint, but previously said they had made “significant efforts” to consult. And there are fresh claims for a review of the process.
Just how piqued Vince Cable was by all this, we may be about to find out.