Former employees of furniture retailer Made.com are seeking legal action after being made redundant during a Zoom call.
The company went into administration on 9 November. This led to 320 jobs being cut, in addition to 79 staff who had resigned and were working their notice being asked to leave immediately.
Made’s administration comes at a time of major instability in the UK economy, when inflation has reached 11.1%, its highest for 41 years.
The company was bought by fellow retailer Next, but the deal did not include taking on Made’s staff.
Some employees were notified via Zoom call that they would be losing their jobs with immediate effect.
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Around a dozen employees reached out to law firm Aticus to pursue the legal action after being made redundant.
A successful appeal could see staff receive eight weeks’ pay in compensation, capped at £571 a week.
Nick Hurley, partner and head of the employment group at law firm Charles Russell Speechlys, said that the rushed nature of the Next takeover meant that due processes regarding Made employees was not followed.
Speaking to HR magazine, he said: “Unfortunately the legal remedies for employees in companies that become insolvent are very limited, especially where they may be left behind in the insolvent business on a pre-pack sale. The commercial imperative for the administrators is to sell what is left of the business for the best price for the benefit of the creditors.
“Often they just don’t have any time to conduct the normal employment consultation processes, which can leave a bitter taste in the mouths of the remaining employees.”
Aticus plans to file a protective award claim against Made.com – compensation awarded by an employment tribunal if an employer fails in its duties.
Hurley added that the sacked employees will find it difficult to win the case.
He said: “A defence to the protective award may also be made out on the basis that there were ‘special circumstances’ that made it impracticable to consult. However, recent cases have shown that this defence is very hard to rely on even in the precarious circumstances of an insolvency.”
Administrators from PwC warned up to 12,000 customer orders that had been paid for would not be delivered due to production issues.