Diana Johnson – 2014 Parliamentary Question to the Department for Business, Innovation and Skills

The below Parliamentary question was asked by Diana Johnson on 2014-06-24.

To ask the Secretary of State for Business, Innovation and Skills, how many outstanding protective awards to be paid by the Insolvency Service’s Redundancy Payments Services are owed to firms in which less than 20 people are employed on one site.

Jenny Willott

Under legislation, a protective award can be made where it is determined that there was insufficient consultation in situations involving 20 or more redundancies in one establishment. The Redundancy Payments Service makes payments, to affected employees, where an employment tribunal has made an award and the employer is insolvent.

The Employment Appeal Tribunal, in the Woolworths case (USDAW v WW Realisations 1 Ltd and others), decided that it should remove the European test of ‘establishment’ from UK law. The Department is appealing this judgment as we do not agree with this interpretation of the law.

We think the right interpretation of the law is that employers must consult employee representatives if making 20 or more redundancies at one establishment. In a dispute, it is for the employment tribunals to decide what is an establishment on the facts of each individual case.

Until the Woolworths appeal is determined, employment tribunals are staying (not deciding) claims from employees who worked on sites with fewer than 20 proposed redundancies and the RPS is unable to make payments to such employees.

Information on the number of affected cases is not readily available and could only be obtained at disproportionate cost.