Following its sale by Philip Green to Dominic Chappell in 2015, BHS collapsed into administration in April 2016 with a loss of circa 11,000 jobs.
Administrators, Duff and Phelps were appointed and sought to find a buyer for BHS.
Under s.188 of the Trade Union and Labour Relations (Consultation) Act 1992 (TULRCA), an employer is obligated to collectively consult with its employees when proposing to make redundancies. Where an employer proposes to make redundant between 20-99 employees, they must consult with those employees over a period of 30 days. Where an employer proposes to make 100 or more employees redundant, the consultation period is 45 days. Failure to consult entitles the employees to a Protective Award- punitive damages of up to 90 days’ pay.
Our Employment solicitors, Carl Moran and Hannah Durham brought a Protective Award claim on behalf of 110 head office employees and successfully argued that BHS had failed to consult with its employees before making them redundant. The Tribunal ruled that there had been a failure to consult and that the employees were to be awarded the maximum protective award. The total value of the successful award was circa £1m.
Carl Moran told The Lancaster Guardian
“This case centred on the fact that BHS failed to collectively consult with our clients before making them redundant. In light of this, the employment Tribunal has awarded each of them the maximum possible damages of 90 days’ pay. This case involved very complex legal issues and we are pleased to have been able to successfully represent our clients and to have secured a just outcome for them.””
Following the administration, the company’s pension scheme had a deficit of more than £570m. In 2018, Philip Green agreed to inject £363m back into the pension fund whilst in early 2020, Chappell was ordered to pay back in £9.5m after losing a court appeal.
In early 2018, Chappell was found guilty of various charges associated with his failings to provide information and documents to The Pensions Regulator.
In 2019 the Insolvency Service disqualified Chappell from all directorships for the next 10 years along with two other former BHS directors who were banned for 5 years.