Theatre company that failed to consult on redundancies attracts the maximum compensation awards for its redundant staff

In a recent tribunal case involving the Southport Theatre and Convention Centre, the theatre company running the venue, The Bliss Space, lost claims from its workers for failing to consult on proposed redundancies.

Mr V Whalley and 22 others v The Bliss Space (Southport) Ltd (in voluntary liquidation)

The theatre company had furloughed its staff in March 2020 owing to the COVID-19 pandemic. In May 2020, rather than notify any of its workforce what it was proposing to do, it announced on social media it had permanently closed its doors for good and had entered into liquidation. Within the post it was clear that the theatre company had been in discussions with the local authority regarding its proposals to liquidate.

The workforce were subsequently contacted by the liquidators in relation to their redundancy payments.

Employers are always obliged to consult with staff in respect of redundancies. However, where an employer proposes to make 20 or more staff redundant within a 90-day period, as in this case, it is legally obliged to collectively consult with the workforce trade unions or workplace representatives by virtue of s188 of the Trade Union and Labour Relations (Consolidation) Act 1992. This is part of following a fair process and procedure in relation to redundancies.

There can be occasions where it will not be possible or ‘reasonably practicable’ for employers to consult in accordance with the law. However, in this case, the tribunal found there was no good reason for not doing so – particularly as the social media post indicated that it had been discussing its position with the local authority. Its workforce could have been informed much sooner.

The maximum award for failing to consult is 90 days per employee. This is what the tribunal awarded in this case.

Summary

The above case highlights the risks associated with failing to consult with staff and unions in relation to proposed redundancies.