A tribunal has ruled that more than 900 people who lost their jobs when Shearings went into administration last year were not properly consulted in the redundancy process.
About 2,600 jobs were lost and 64,000 bookings cancelled when the coach operator’s parent company, Specialist Leisure Group, entered administration in May 2020.
The Shearings brand has since been acquired and relaunched by Leger Holidays, with no link to SLG.
Following SLG’s demise, 937 former staff instructed employment law experts to pursue legal action on their behalf, claiming they were not consulted correctly over the redundancy process.
A judge at an Employment Tribunal Hearing has now ruled Shearings had failed to follow the correct procedure to carry out a proper consultation.
Lawyers from Simpson Millar, the firm representing the workers, said the value of the claim is expected to be in the region of £4 million.
Damian Kelly, head of employment at Simpson Millar, said: “The collapse of Shearings in May 2020 came at very difficult time for the staff and left thousands of workers out of work during what has been an incredibly tough year for all, but especially for those working in the travel industry. The value of the claim is in the region of £4 million.
“While many people assume that little can be done when a business goes into insolvency, that is not the case. Employers still have a duty under UK employment law legislation to carry out a proper consultation with staff at risk of redundancies.
“When that law is disregarded, it can lead to an extremely difficult and distressing time for those affected – many of whom are left struggling financially, whilst also looking to secure a new role with little, if any, notice.
“In this instance, an employment tribunal judge ruled that Shearings had failed to follow the correct process, which has left hundreds of individuals out of pocket.
“We are delighted with the outcome and to have been able to support our clients in order to access the justice that they deserve.”
The judgment now paves the way for a pay-out in the form of a Protective Awards claimed from the Redundancy Payments Service (RPS), which is part of the government’s Insolvency Service.
The RPS is a government funded scheme set up to pay employees up to a maximum of eight weeks’ pay where an employer has become insolvent if found not to have properly consulted with its employees over subsequent redundancies. It also pays other funds owed to employees including redundancy pay, arrears of holiday pay and notice pay. However, while these claims can be made by an employee completing an online form, a claim for a Protective Award requires a formal Employment Tribunal Order.
Mr Kelly added: “As a result of the employment tribunal judgments our clients will now be compensated by up to 90 days’ gross pay, albeit capped at £4,304 given that the company is insolvent.
“The National Insurance Fund which employees pay into is a lifebelt for many people who find themselves in such circumstances, and in this instance our clients are delighted that the matter is now coming to a close so that they can finally move forward with their lives.”
Simpson Millar’s leading employment law team is currently instructed by former employees affected by the collapse of a number of well-known travel companies including Thomas Cook and Flybe.
Recently, the firm secured more than £135,000 for workers who lost their jobs when British Midland International (FlyBMI) went into administration.
Kelly added: “Sadly we are working on behalf of several thousand clients whose livelihoods have been turned upside down by the turbulence experienced in the travel industry over the past year or so.
“The process to claim for a Protective Award does not result in an influx of cash immediately as a claim has to be brought to an Employment Tribunal which can take time given the resources currently in Tribunals.
“However, it is a legal safeguard that those affected by the lack of consultation should avail themselves of. We are passionate about pursuing a claim for a Protective Award in order to recover money in successful claims as this will provide some longer-term security for those affected.”