Essential reading for retailers and suppliers in the home improvement market
News has spread this week that former Focus employees could be in line for compensation after the firm and its administrators failed to carry out a proper period of consultation when axing staff last year. Sounds like a great outcome for those who lost their jobs - except when you look at the fine print. The mystery for me, as I am not quite au fait with the ins and outs of employment tribunals, is why the payout has been restricted to stores employing fewer than 20 employees, particularly when the retailer, who had been struggling for some time, was likely to have been cutting costs and its headcount left, right and centre.

And judging by some very frustrated comments posted on Diyweek.net - a number of which we were unable to make live for various reasons - the restriction on the payout is a bone of contention for many of the DIY firm's former staff.

It is also likely to leave a bitter taste with many ex-Focus employees to learn that the administrators at Ernst & Young who were working on the case were reportedly earning more than £250 an hour.

Under employment law, firms are legally obliged to give 90 days' notice in a redundancy situation, although I have been told that an insolvency process makes this notice period and full consultation with staff impossible, due to the time constraints placed on those responsible for winding up the business. However, this tight schedule is likely to be of little significance to the employees who were effectively left high and dry when the firm went under. And, while some employees could stand to get at least 56 days' pay, others are likely to receive nothing.

Moreover, the fact that the money to make amends for Focus' breach of its legal obligations will come out of the pockets of the taxpayer - the very same people who are already struggling in the current climate - rather than the flourishing insolvency firms, is also likely to cause grumbles.

The Focus ruling also comes hot on the heels of a £68m payout to more than 24,000 ex-Woolworths employees after administrators failed to consult with unions over redundancies.
Of course, companies are always going to go bust and staff will be laid off but there obviously needs to be a review of the process and how employees are looked after to avoid situations like this.
View User Profile for Fiona Garcia Blog entries from Fiona Garcia, DIY Week editor





Posted by Fiona Garcia | 5 July 2012 | 12:31 | More from: Editor's Blog

Comments

Published prior to March 2014
By Paul
The only fair system should be a sliding scale according to how many people where at the store when it closed. As for the administrators plundering 250 per hour, they did nothing except give the hardworking Focus staff % labels to write on, and they call that fair! No wonder the guy that closed our store had a top of the range Jaguar
Published prior to March 2014
By Alex
The store has to have over 20 members of staff before you get a payout. We are still trying to contact everyone. You just need to play it by ear. The Paignton store has had their payout so it is happening.
Published prior to March 2014
By Paul
Does anyone know how many staff the stores who will get the money must have, and also when are we likely to be informed, as I am still waiting to hear about money owed to me as a creditor.
Comments are closed on this post.
*

Latest reader comments

re: Carl Kammerling Fusion 2021 Trade Promotion – Filled with exciting new deals!

MIKE
GOOD AFTERNOON,WE USED TO DEAL WITH YOUR COMPANY MANY YEARS AGO, BUYING LARGE STOCKS OF DELETED AND RETURNS ITEMS.IF YOU HAVE ANY CLEARANCE ...

re: Toolbank

Bilal Ali
Hi Trust you are doing great. My name is Bilal Ali. I am the owner of Azaan International Ltd, a company specialized in products. We are ...

re: Woolworths staff reunited by new website

John Zullo
Hi I'm trying to find Lisa assistant manager of woolworths in the metro centre 1999 I only now her by her 1st and middle name Lisa Marie ...

re: Planning application submitted for new Homebase store in Abingdon

Gel
They closed their store last year!http://www.oxfordmail.co.uk/news/17570442.homebase-abingdon-starts-closing-sale/...

re: Latest update on Green Homes Grant and implications for homeowners and landlords

John Hart
After applying for a green homes how long will it take for a decision? thanks...

Most read stories