Unless you've been hiding in a cave for the last few weeks, you will know that the News of the World ("NOTW") announced on Thursday 7 July that its last edition would be published on Sunday 10 July. As you might expect, there are various potential employment law consequences arising out of the closure.
Redundancy consultation?
James Murdoch announced the closure to staff on 7 July and said "I can understand how unfair these decisions may feel. Particularly for colleagues who will leave the Company. Of course, we will communicate next steps in detail and begin appropriate consultations."
In our view, these actions are almost certain to lead to claims for failure to collectively consult about the redundancies under TULR(C)A 1992. Any consultation process which is now undertaken is likely to be seen as a sham, as the decision has already been made - what is there left to consult about? That's a penalty of 90 days' pay per affected employee, unless NOTW is able to plead the "special circumstances" defence (which is extremely rare).
A spokeswoman for News International on 7 July refused to say whether the News of the World's 200 employees would be made redundant and said that they would be invited to apply for other jobs in the company. This, at a time when print media is facing a tremendous struggle for survival and papers are surviving on skeleton staff, following huge redundancy programmes in recent years. It seems unlikely that News International is carrying a large number of vacancies unless...
Application of TUPE?
...the Sun decides to print a Sunday edition. In which case, it may be possible for the NOTW employees to claim that their employment has transferred automatically by operation of law from NOTW to The Sun, under the Transfer of Undertakings (Protection of Employment) Regulations 2006 ("TUPE"). This will largely depend on the length of time between the closure of NOTW and the start-up of a "Sunday Sun" and whether there is a genuine transfer of an economic undertaking which retains its identity following the transfer. Factors which will help to determine this include whether goodwill (or lack thereof, in this case, perhaps?!) has been transferred; whether stock, buildings and other tangible assets are transferred; and the extent of disruption of the activities, amongst other matters. This remains to be seen!
Stigma damages?
One final point is that, if the NOTW staff bring claims of unfair dismissal, they may well be eligible for "stigma damages" under the principle set out in the case of Malik v BCCI 1997. BCCI was a financial institution which collapsed in the 1990's following allegations of money laundering and other financial irregularities. In the Malik case, a former employee of the bank brought an unfair dismissal claim. The House of Lords held that the bank's corrupt and fraudulent practices so tainted the employees who had worked there at the time (even if they were not involved in the fraud/malpractice themselves) that their future employability was adversely affected and they were entitled to additional damages above and beyond the usual compensation for unfair dismissal, to reflect the fact that it would be much harder for them to find a new job in future.
It does not take a huge leap of the imagination to conceive of former NOTW employees making similar allegations, although they would need to demonstrate more than mere incompetence on the part of the employer and show dishonest and corrupt conduct.
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