Thousands of former Comet employees could share nearly £25 million after an Employment Tribunal ruled that the company and its administrator Deloitte failed to consult staff properly when nearly 7,000 people were made redundant in 2012.
Whenever large scale redundancies are proposed, an employer, or its administrator, must consult with employee representatives. Failure to comply exposes the insolvent employer to compensation claims of up to 90 days' pay for each affected employee. An insolvency situation does not exempt an employer from this duty and the government ultimately picks up the bill, subject to certain caps on the payments.
The employer or its administrator must also notify the Department of Business Innovation & Skills (BIS) of the proposed redundancies. Failure to properly notify BIS is a criminal offence punishable by a fine of up to £5,000.
Now lawyers for the redundant workers are asking the government to investigate whether Deloitte, as administrators, should face criminal charges for failing to notify BIS of the redundancies. It is reported that although redundancies were being actively considered at the time, the administrator wrote to BIS stating there were "no proposed redundancies at present".
The Insolvency Service is investigating the Comet case and it has been reported that, as part of that investigation, it is considering whether to refer the matter to police or to the administrators' authorising body.
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