Over 400 ex-employees of failed energy saving products firm Mark Group have won a court case against their former employer, bringing an end to the almost 18-month legal battle over their treatment.
Judgment has been awarded on behalf of 428 claimants represented by Nualaw, which successfully argued that there had been “a complete failure” to conduct a neccessary consultation with employees prior to mass redundancies which followed the collapse of the company in October 2015.
Employment judge Hutchinson concluded: “I have heard no evidence at all in support of any contention that there was any consultation or any mitigating circumstances as to why the maximum period should be reduced.
“Mark Group before they appointed administrators knew very well that they were in financial difficulties and did not consult at all with any of their employees, warning them of the difficulties that they face and/or taking steps to appoint representatives if they were going to be needed.”
“The fact that respondents [Mark Group and the position of the secretary of state for Business, Innovation and Skills] took steps to support and inform the claimant’s after redundancies took place is not the point. The idea of consultation is that it should take place in good time and before any redundancies take effect”
Awarding a sanction for a breach of Mark Group’s obligations set out in Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992, the judge awarded 90 days gross pay to reflect the seriousness of Mark Group’s default. However, given the administration of Mark Group the claimants will have to claim from the national insurance fund.
With Mark Group liquidated and their owner SunEdison also declaring bankruptcy, claimants have little recourse but to claim from the fund.
A statement released by Nualaw said: “Several of our clients have expressed dissatisfaction that the compensation is not payable by Mark Group.”
It will now take several weeks to determine how much each claimant will be awarded depending on their individual schedules and benefits status. However the maximum payable by the fund, which acts as a guarantee institution when a company becomes insolvent, is the claimants’ gross weekly pay, capped at £489 per week, for a total of eight weeks.
The remainder of the award is technically payable by Mark Group, although the claimants will be in the same position as other unsecured creditors.
Nualaw has estimated the final bill could top £1 million, plus tribunal fees of £1,500.