Redundant staff from Wigan-based coach company Shearings win legal battle following firm's collapse
More than £4m is expected to be shared between hundreds of ex-employees.
More than 900 people who lost their jobs when popular coach holiday company Shearings went into administration last year have won their legal battle against the company after a judge ruled that it failed to properly consult staff when making redundancies.
While the Wigan-based business was later acquired by Leger Holidays more than 2,500 jobs were reportedly lost and 64,000 bookings cancelled when the firm’s umbrella company, Specialist Leisure Group, collapsed into administration in May 2020.
Following the company’s demise, 937 former staff instructed employment law experts at Simpson Millar to pursue legal action on their behalf amid claims they were not consulted correctly over the redundancy process.
Now, one year on, the workers have won their legal battle against the business after a judge ruled that Shearings had failed to follow the correct procedure to carry out a proper consultation with staff at risk of losing their jobs.
Lawyers representing the workers say the value of the claim is now being calculated, and is expected to be in the region of £4 million.
Damian Kelly, head of employment at Simpson Millar, appeared before the Employment Tribunal Hearing in the case.
Mr Kelly 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 payout and comes in the form of protective awards which have been claimed from the Redundancy Payments Service (RPS), part of the Government Insolvency Service.
The RPS pays employees up to a maximum of 8 weeks' wages where an employer has become insolvent and has been found not to have properly consulted with its employees over subsequent redundancies.
The RPS 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 said: “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.
“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.”
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