July 30, 2018

Carillion workers take legal action in an attempt to reclaim redundancy pay

News Article

A group of former Carillion construction workers have launched legal action against both their former employer and a Government department, following the alleged breach of redundancy rules.

The legal challenge is being backed by the Unite union and relates to an alleged lack of consultation during the redundancy process.

The claim is primarily being brought against former employer, Carillion, but the tribunal has also added the Secretary of State for Business, Energy and Industrial Strategy as an additional respondent to the claim as their agency, the Insolvency Service, will be required to pay the workers if their claim is successful.

The group action by Unite members involves up to 80 workers who were employed by Carillion’s Planned Maintenance Engineering arm, under contract to GCHQ.

If the legal action is successful, each former worker would normally be entitled to up to 90 days’ pay. However, due to the fact that Carillion is in liquidation and the payment would be made by the Insolvency Service, the amount would be capped at 8 weeks, at a maximum weekly amount of £489*.

Following the compulsory liquidation of Carillion in January this year, the Carillion workers based at GCHQ were told by liquidators PriceWaterhouseCoopers that they faced redundancy.

The workers were subsequently dismissed on 6 February, without consultation and told they would need to claim redundancy from the Government’s redundancy payments office.

The workers were re-employed by G4S but as their former employer was in compulsory liquidation, the normal Transfer of Undertakings Protection of Employment (TUPE) regulations did not apply, meaning their normal terms and conditions were not protected.

Samantha Randall, a Solicitor and employment law expert with Palmers, said: “This case highlights the complexities of employment law relating to redundancy and TUPE.

“Any construction firm that needs to reduce its workforce needs to be aware of the rules relating to redundancy, including consultation with both the workers and their union. A failure to follow the rules can lead to a costly employment tribunal and if the firm is still trading but already suffering from financial stress, this only serves to exacerbate the situation.

“If a downsizing of the workforce is inevitable, it is important to seek expert legal advice to ensure that the regulations are not breached.”

For advice on employment law, including information about Palmers’ transparent, fixed price legal services for employers, please contact us.

* Maximum weekly redundancy pay-out of £489 is based on the 6 April 2017 to 5 April 2018 rate. The current rate is £508.