Member Article

Leeds Employment Tribunal starts hearing against electrical retailer Comet

The Leeds Employment Tribunal will today see the start of a two week hearing which may have implications for all employers planning to make more than 19 redundancies across a number of branches.

Leeds based law firm, The Needle Partnership LLP is representing 275 ex Comet employees who claim that the electrical retailer failed to comply with its statutory obligations to consult with them prior to making them redundant following Comet’s administration.

If they succeed in their argument, the former employees anticipate that they will receive compensation in the form of a “protective award”, which can be up to 90 days’ pay per employee. This is the largest grouping nationwide of ex Comet employees for the purposes of the Tribunal claims.

Comet’s demise is one of the biggest High Street casualties of recent years.

The 236-store business, which at the time employed around 7,000 people, had been bought in February 2012 for the nominal sum of £1 by private equity firm OpCapita. OpCapita bought Comet from Kesa Electrical, which also gave OpCapita £50m of working capital.

However, OpCapita failed to turn around Comet’s fortunes and on November 2, 2012 the retailer was put into administration.

By Christmas 2012 99% of Comet’s employees had been made redundant as Comet’s administrator, Deloitte LLP closed all its stores, home delivery platforms, distribution centres, call centres and offices.

According to The Needle Partnership, employees were made redundant without notice and with little, if any consultation and many employees were simply told that their place of work was closing that day and that they were therefore dismissed without any notice, or were just handed a ‘white envelope’ on their last day of work and told they could claim limited statutory notice and redundancy pay from the Insolvency Service.

A decision about whether the redundant employees will be entitled to a protective award is expected at the end of this hearing.

However, the claims by employees who worked at smaller establishments (i.e. those with fewer than twenty employees) have been stayed pending the decision of the European Court of Justice in the Woolworths case which will decide whether these employees are also entitled to collective consultation rights.

Victoria Robertson, Employment partner of The Needle Partnership LLP says: “The Comet employees were treated with very little respect.

“Comet’s employees were in general loyal and long-serving, with some cases of generations of families working for the retailer, and some employees having more than twenty years’ service.

“Yet, they were given no notice of their redundancies and no proper consultation took place.

“They not only lost their jobs, but also lost the chance to have proper notice pay and redundancy pay.

“The administrators left the Insolvency Service (i.e. the tax payer) to pick up the tab for limited redundancy and notice payments, and the Insolvency Service will also be paying any protective awards.

By contrast, the Administration Progress Report of October 9, 2013 shows that Comet’s administrator, Deloitte LLP, was paid fees of nearly £5m during the administration period.“

Deloitte issued a statement to Bdaily that said: “Following appointment as administrators to Comet Group Limited, the Administrators continued to trade the business whilst seeking to identify a purchaser.

“Unfortunately, despite extensive efforts in very challenging conditions, a suitable purchaser was not found and regrettably Comet Group Limited was left with no choice but to make a large number of staff redundant and ultimately cease trading.

“The former Administrators of Comet have been, and will continue to be, actively engaged in the Employment Tribunal process to assist the Tribunal in reaching its decision.”

This was posted in Bdaily's Members' News section by Clare Burnett .