Work

Court cuts WRC compensation award to Debenhams staff by 50%

Most of the €3m fund allocated to retraining staff was unspent and returned to Government at the end of last year

Former Debenhams staff members outside the WRC, in Ballsbridge, Dublin. Photograph: Dara Mac Dónaill

Emmet Malone Work Correspondent
Thu Apr 11 2024 - 17:06

A Workplace Relations Commission (WRC) award to former Debenhams staff has been halved on appeal by the Labour Court. About €2 million was awarded to 800 staff for the failure of the company to properly consult with them ahead of the closure of its stores four years ago.

The test case involved Jane Crowe, a former Mandate trade union shop steward at the chain’s branch on Henry Street, Dublin, where she had worked for 24 years at the time of the company’s liquidation.

Separately, it has emerged that more than two-thirds of the money allocated to a Government-backed retraining fund for all former Debenhams workers has been returned unspent by further education and training agency, Solas.

At the WRC, Ms Crowe was awarded two weeks’ wages on the basis that Debenhams had been so late in starting the process of consultation with staff on its plans to close that no other options were realistic.

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It awarded her a further two weeks’ pay on the basis that liquidators Kieran Wallace and Andrew O’Leary, then of KPMG, had failed to provide “relevant information” to Mandate on the profitability of the stores and revenue from online trading.

In a decision sent to the parties, but not yet published, the Labour Court has upheld the first award but overturned the second, saying the company’s actions had indeed restricted the options available in the consultation process but that the liquidators had complied with their obligations.

In Ms Crowe’s case, the decision means the compensation she receives will amount to €900 rather than €1,800. The total payable to the roughly 800 Mandate members who were employed by the company will now be in the region of €1 million, rather than twice that.

A separate claim was pursued by Siptu on behalf of a far smaller group and the Labour Court decision is broadly in line with the award Siptu member Breda Cox, a catering assistant, received at the WRC.

“It’s disappointing but the fact that one of the claims was upheld is recognition that we were not treated properly and hopefully it is something that will benefit other retail workers who lose their jobs because the Government has still not brought in the proper protections that were talked about after what happened [to] the Clerys workers and ourselves,” said Ms Crowe following the decision.

“It’s good that we are going to get something [in addition to the statutory redundancy received at the time of the closure] because it means everything that we did afterwards, the picketing and the occupations, weren’t all for nothing.”

Mandate official Michael Meegan said he was confident staff would receive the funds awarded. However, it remains to be confirmed that the workers will be considered preferential creditors with regard to the compensation awards and that all of the funds required to pay the money are available.

More than two-thirds of the €3 million retraining fund established to support the Debenhams workers as part of a deal intended to resolve their dispute was returned unspent by Solas to the Government, worker representatives said.

At the time, then minister for further and higher education Simon Harris, now Taoiseach, said the scheme would offer specialised supports, personalised coaching, assistance with the cost of education and childcare. “I am pleased this fund will offer some light at the end of a difficult road for these workers.”

Ms Crowe said many of the former Debenhams staff found the supports difficult to apply for and many struggled to fund the upfront costs of buying equipment, such as laptops, that they would have been entitled to reclaim.

“Some people did get money and used it to buy things like computers and some did courses but a lot more just got on with their lives. They needed to get other jobs,” she said. “The whole thing was supposed to be modelled loosely on a European fund but people felt they stuck to the letter of the regulations; that there wasn’t enough flexibility.”

In all, €2.1 million of the €3 million is understood to have been returned late last year. Ms Crowe said a request was made to extend the lifetime of the scheme but was unsuccessful. Solas was approached for comment.

Emmet Malone

Emmet Malone

Emmet Malone is Work Correspondent at The Irish Times

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