Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

 

CASE REF:   291/13 & Others

 

 

 

CLAIMANT  :          Bob Adamson & Others

 

 

 

RESPONDENT:      David Patton and Sons (NI) Ltd (In Administration)

 

 

 

 

 

Certificate of Correction

 

 

1.       The decision issued on 31^st May 2013 contained incorrect Panel Members names.  The correct names are in point 2 below.

 

 

2.       Members      Ms D Adams

                              Mr P McKenna

 

 

 

 

 

 

 

 

 

 

 

Chairman: __________________________________________

 

 

Date: __________________________________________

 

 

 

 

THE INDUSTRIAL TRIBUNALS

 

CASE REF:   291/13 & Others

 

 

 

CLAIMANTS:                    Bob Adamson & Others

 

 

RESPONDENT:                David Patton and Sons (NI) Ltd (In Administration)

 

 

 

DECISION

(A)     Each relevant claimant’s protective award complaint is well-founded.

 

(B)     We have decided to make a protective award in respect of each relevant claimant.

 

(C)     It is ordered that the respondent shall pay remuneration for the protected period.

 

(D)           The protected period began on 9 November 2012 and lasted for 90 days.

 

The attention of the parties is drawn to the Recoupment Notice below.

 

The address of the respondent is c/o Keenan Corporate Finance Ltd, Arthur House, Arthur Street, Belfast BT1 4GB.

 

 

Constitution of Tribunal:

Chairman:              Mr P Buggy

Members:              Ms D Andrews

                              Mr P McMahon

 

         

Appearances:

Ms J Riddell was represented by Mr C McGlone of Donnelly and Kinder Solicitors.

 

All of the other relevant claimants were represented by Mr J O’Neill, Solicitor.

 

There was no appearance on behalf of the respondent.

 

REASONS

 

1.       In each of these consolidated cases, each “relevant claimant” makes a protective award complaint pursuant to Article 217 of the Employment Rights (Northern Ireland) Order 1996 (“the Order”).  The respondent company (“the Company”) is in administration.  In each instance, the administrator has given permission for the presentation or continuance of the proceedings which form the subject-matter of this Decision.

 

2.       In the present context, a claimant is a “relevant claimant” if his or her protective award complaint is within the scope of these proceedings.  The persons whose names and case reference numbers appear in the Appendix to this Decision are relevant claimants. 

 

3.       In each relevant case, the administrators have presented a response.  However, the Company was not represented at this hearing. During the course of the hearing, no oral testimony was presented on behalf of the Company.  No documentary evidence was provided on behalf of the Company.

 

4.       Each claimant was an employee of the Company.  Each claimant was dismissed on or after 9 November 2012, because of redundancy.  More than 100 employees were dismissed with effect from 9 November 2012.  Some employees were dismissed, again by reason of redundancy, subsequently.  The workforce to which the relevant claimants belonged was not unionised.  No relevant employee representatives (for collective consultation purposes) had been elected.  The employer had made no arrangements in relation to the election of relevant employee representatives.

 

5.       On the basis of the uncontroverted assertions of the relevant claimants, we are satisfied that no relevant collective consultation took place. 

 

6.       The response form which the administrator presented in the Riddell case is typical of the responses which he presented in each of the other relevant cases.  In his response in the Riddell case, the administrator makes the following comments:

 

                  “In relation to the … claim for a protective award it is denied.  Due to the poor financial situation and the significant workforce of the Company, it was not reasonably practicable for the Company post Administration to comply with the duties to inform and consult.  The Company had to make significant redundancies almost immediately after my appointment as the Company was unable to finance the on-going payroll cost.  As Administrator I contend on behalf of the Company post Administration that this amounted to special circumstances rendering it not reasonably practicable to comply with the requirements to inform or consult.”

 

7.       In deciding that the protective award complaint was well-founded, and in deciding to make a protective award, in each relevant case, of 90 days duration, we have had regard to the facts which are not disputed in this case, and we have also had regard to comments made in the Court of Appeal judgment in Haine v Day [2008] IRLR 642, especially at paragraphs 61-68 of that judgment. 

 

8.       The assertions of the Administrator, as quoted above, are mainly expressions of opinion.  The Administrator was not present to make those assertions by way of oral testimony, upon which he would have been open to cross-examination.  It is settled law that the fact that a Company is insolvent does not, in itself, constitute “special circumstances” for the purposes of the protective award legislation.  The legislation provides that, where there are “special circumstances” within the meaning of the legislation, the employer must take all such steps towards compliance with the requirements of Article 216 (relating to the duty to inform and consult) as were reasonably practicable in those circumstances.  There is no evidence in this case that any steps were made with a view to even partially complying with the duty to collectively consult. 

 

9.       We note the provisions of paragraph (6) of Article 217 of the Order, which is in the following terms:

 

                  “(6)   If on a complaint under this Article a question arises –

 

                          (a)    whether there were special circumstances which rendered it not reasonably practicable for the employer to comply with any requirement of Article 216 or

 

                          (b)    whether he took all such steps towards compliance with that requirement as were reasonably practicable in these circumstances,

 

                  it is for the employer to show that there were and that he did”.

 

10.     In our judgment, in this case, this employer has not shown either “that there were” or “that [it] did”. 

 

11.     We can quite understand that the financial situation of the Company was such that it could not afford to collectively consult for a lengthy period.  However, high quality consultation could have been carried out within a very short period.  (In our view, it is the quality of consultation that is of overriding importance, not its duration). 

 

Recoupment Notice

 

[1]      In the context of this Notice, “the relevant benefits” are jobseeker’s allowance, income support and income-related employment and support allowance.

 

[2]      Until a protective award is actually made, an employee who is out of work may legitimately claim relevant benefits because, at that time, he or she is not (yet) entitled to a protective award under an award of an industrial tribunal.  However, if and when the tribunal makes a protective award, the Department for Social Development (“the Department”) can claim back from the employee the amount of any relevant benefit already paid to him or her; and it can do so by requiring the employer to pay that amount to the Department out of any money which would otherwise be due to be paid, to that employee, under the protective award, for the same period. 

 

[3]      When an industrial tribunal makes a protective award, the employer must send to the Department (within 10 days) full details of any employee involved (name, address, insurance number and the date, or proposed date, of dismissal).  That is a requirement of regulation 6 of the Regulations which are mentioned below.

 

[4]      The employer must not pay anything at all (under the protective award) to any such employee unless and until the Department has served on the employer a recoupment notice, or unless or until the Department has told the employer that it is not going to serve any such notice.

 

[5]      When the employer receives a recoupment notice, the employer must pay the amount of that recoupment notice to the Department; and must then pay the balance (the remainder of the money due under the protective award) to the employee. 

 

[6]      Any such notice will tell the employer how much the Department is claiming from the protective award.  The notice  will claim, by way of total or partial recoupment of relevant benefits, the “appropriate amount”; which will be computed under paragraph (3) of regulation 8 of the Employment Protection (Recoupment of Jobseeker’s Allowance and Income Support) Regulations (Northern Ireland) 1996  (” the Regulations”). 

 

[7]      In the present context, “the appropriate amount” is the lesser of the following two sums:

 

          (a)    The amount (less any tax or social security contributions which fall to be deducted from it by  the employer) accrued due to the employee in respect of so much of the protected period as falls before the date on which the Department receives from the employer the information required under regulation 6 of the  Regulations, or

 

          (b)    The amount paid by way of, or paid on account of, relevant benefits to the employee for any period which coincides with any part of the protected period falling before the date described in sub-paragraph (a) above.

 

[8]      The Department must serve a recoupment notice on the employer, or notify the employer that it does not intend to serve such a notice, within “the period applicable” or as soon as practicable thereafter.  (The period applicable is the period ending 21 days after the Department has received from the employer the information required under regulation 6).

 

[9]      A recoupment notice served on an employer has the following legal effects.  First, it operates as an instruction to the employer to pay (by way of deduction out of the sum due under the award) the recoupable amount to the Department; and it is the legal duty of the employer to comply with the notice.  Secondly, the employer’s duty to comply with the notice does not affect the employer’s obligation to pay any balance (any amount which may be due to the claimant, under the protective award, after the employer has complied with its duties to account to the Department pursuant to the recoupment notice).

 

[10]    Paragraph (9) of regulation 8 of the 1996 Regulations explicitly provides that the duty imposed on the employer by service of the recoupment notice will not be discharged if the employer pays the recoupable amount to the employee, during the “postponement period” (see regulation 7 of the Regulations) or thereafter, if a recoupment notice is served on the employer during that postponement period. 

 

[11]    Paragraph (10) of regulation 8 of the 1996 Regulations provides that payment by the employer to the Department under Regulation 8 is to be a complete discharge, in favour of the employer as against the employee, in respect of any sum so paid, but “without prejudice to any rights of the employee under regulation 10 [of the  Regulations]”.

 

[12]    Paragraph (11) of regulation 8 provides that the recoupable amount is to be recoverable by the Department from the employer as a debt. 

 

 

 

Appendix (The relevant claimants)

 

CASE REF:   291/13, 292/13, 293/13, 294/13, 295/13, 296/13, 290/13, 297/13, 298/13, 299/13, 300/13, 301/13, 302/13, 303/13, 305/13, 304/13, 306/13, 307/13, 308/13, 309/13, 311/13, 312/13, 315/13, 313/13, 314/13, 397/13, 316/13, 318/13, 317/13, 320/13, 319/13, 310/13, 40/13, 418/13

 

 

CLAIMANTS:          1. Bob Adamson                        18. Ernie McGuckian 

                              2. Isobel Beckett                        19. Jimmy McKane

                              3. Steve Beckett                        20. Kevin McNally 

                              4. Denver Calderwood               21. Thomas Millar 

                              5. Sammy Calvan                       22. Mervin Mitchell

                              6. R D Dickey                             23. Stacey Murdoch

                              7. William Forbes                       24. Martin O’Connor

                              8. David Gilchrist                       25. Andy Patterson

                              9. James Gilchrist                      26. Ian Philliban

                              10. John Gilchrist                      27. Julie Riddell

                              11. Michelle Glover                    28. John Desmond Rock

                              12. Mark Graham                       29. Cliff Scullion

                              13. Robin Graham                      30. David Stirling

                              14. Jeff Lynn                              31. Grace Warwick

                              15. William Cambridge               32. Helen Weir

                              16. Robert McCartney                33. Julie Whorthington                                            17. Mervyn Gourley                   34. James Gilchrist

 

 

 

 

 

 

___________________________

 

Chairman:

 

 

 

Date and place of hearing:  13 May 2013, Belfast.            

 

 

Date decision recorded in register and issued to parties: