PED241

PARTIES:

DIVISION:

SUBJECT:

Appeal of Adjudication Officer Decision No's: ADJ-00038906 (CA-00037923-001)

BACKGROUND:

The Employer appealed the Decision of the Adjudication Officer ADJ-00038906 to the Labour Court on 19 June 2023, in accordance with Section 9 of the Protection of Employment Act, 1977. A Labour Court hearing took place on 14 and 15 February 2022. The following is the Decision of the Court.

DECISION:

Background

This is an appeal by Debenham Retail (Ireland) in liquidation (the Respondent) against Adjudication Officer’s Decision ADJ-00038906 CA-00037923-001 given under the Protection of Employment Act 1977(the Act). The Adjudication Officer held that the claim by the Complainant under the Act was well founded. The Complainant commenced work on 14th October 1996 as a shop assistant with the Respondent.   The parties agree that the Complainant worked 20 hours a week, and that her gross weekly pay was €285.

 On or about the 8th April 2020, the parent company informed the Respondent that it could no longer provide funding. The Board of the Irish company held an emergency meeting and recommended to their shareholder to take immediate steps to petition the Irish High Court to wind up the Company and to have a liquidator appointed.

The Complainant alleges that the requirements of section 9 of the Act have not been complied with. There are three linked complaints PE/23/2, PE/23/3 and PE/23/4.

Summary of Complainant’s case

Mr Kirwan SC on behalf of the Complainant in reading the submission, highlighted three issues the Court needed to consider as follows; when should the consultation process have commenced, was there a breach of s9 of the Act in respect of the commencement of the consultation process, and the number of claims before this Court.

 It is the Complainant’s submission that there are four complaints properly before the Court, two complaints against Debenham Retail (Ireland) Ltd (DRIL) in respect of a breach of ss 9 and 10 of the Act, and two against Debenham Retail (Ireland) Ltd in liquidation, in respect of breaches of ss9 and 10 of the Act. 

In respect of the number of the complaints before the Court, it is the Complainant’s submission that they are entitled to take cases against Debenham Retail (Ireland) Ltd (DRIL) and Debenham Retail (Ireland) Ltd in liquidation. Both parties were in existence during the cognisable period and had responsibilities towards the Complainant. In support of that position Mr Kirwan SC opened to the Court the judgment of the CJEU in the case of Claes v Landsbanki Luxembourg SA Case C -235/10 which held as follows at paragraphs 53 to 55.

“In an insolvency, the legal personality of the establishment whose dissolution and winding up have been ordered by a judicial decision exists for limited purposes only, in particular for the requirements of that procedure and until publication of the accounts for the closure of the liquidation procedure. Nevertheless, such an establishment has a duty, up until the moment when its legal personality definitely ceases to exist, to fulfil the obligations incumbent on employers under Articles 2 and 3 of Directive 98/59.

 As long as the management of the establishment in question remains in place, even with limited powers of management, it must fulfil the obligations of employers under Articles 2 and 3 of Directive 98/59.

 If, however, the management of the establishment in question is taken over in its entirety by a liquidator, it is the liquidator that must fulfil the obligations arising under Directive 98/59”

Mr Kirwan SC submitted that that case supported his contention that there are two sets of obligations, the obligation of the Management, and the obligation of the liquidator. He confirmed that the Complainant accepts that there was only ever one legal entity in being during the relevant period.  However, they are claiming a breach of s9 by DRIL and a separate breach of s9 by DRIL in liquidation. 

Moving on to the next issue, Mr Kirwan stated that he wanted to bring to the attention of the Court the fact that the Complainants Union Mandate does not necessarily accept that the notes of the various consultation meetings which took place, are completely accurate in that they are not a verbatim account of what happened.

 Mr Kirwan SC stated that he wanted to focus on the starting date for consultation on collective redundancies as per the obligations set out in the Act and Council Directive 98/59/EC of 20 July 1998 on the approximation of laws of the Member States relating to collective redundancies (the Directive).  The message of 6th April 2020, from Stefan Vansteenkiste CEO of Debenhams UK (DRL) sets out that the decision was made to enter DRL into administration in the UK on that date.  This was obviously a matter of concern for the Complainant.

 The next event of note was the decision by the Board of Management of DRIL, to cease trading in response to confirmation from DRL UK as sole shareholder, that they would no longer be in a position to fund the Irish operation. Staff were notified of this development by email of 9th April 2020, from Mr John Bebbington Director DRIL which stated,

 “As you know Debenhams has already suspended trading in the Republic of Ireland stores and we can confirm that these stores are not expected to reopen.”

 It went on to say, “the letter is primarily to inform of the decision and further communication about this process will follow from the Liquidator in due course”.

  The final paragraph of the letterstates “we are sorry this decision has been made and we would like to take this opportunity to thank you for your invaluable service to our customers, your unquestionable loyalty to the company and your outstanding teamwork you have all shown throughout your years in Debenhams Ireland and wish you every success for the future.”

 Mr Kirwan SC on behalf of the Complainant submitted that this was a clear indication that the Respondent was contemplating redundancies on the 9th April 2020, and in order to conform with the requirements of the Act and the Directive, that’s when the consultation should have commenced.

 Ms Sinead O’ Connor Director with responsibility for HR, wrote by email to Mr Gerry Light Mandate Trade Union as the employees’ representative on the 14th April 2020 some five days later.  This letter stated, “please note the following information in relation to the proposed redundancies at Debenhams Retail (Ireland) Limited (the Company), in accordance with section 10 of the Acts”. 

The letter addressed the various requirements set out at s10 (2) (a) to (f) but made no reference to s9 of the Act, or the requirement for consultation with the employees.  In a letter of the same date, sent to Minister for Employment Affairs and Social Protection as required under section 10 (3) of the Act, Ms O’ Connor states “The purpose of this letter is to inform you that Debenhams Retail (Ireland) Limited (the Company) is insolvent and that a liquidator will be appointed. As a consequence, there will be collective redundancies in the business of the Company as follows.” The letter then went on to set out the details as required by the Act.

 It is clear from the correspondence that the text in the letter to the Minister was more definitive in that it stated there will be redundancies, yet the letter to the Unions stated ‘proposed’ redundancies. Both letters were issued on the same day by the same person and demonstrate that redundancies were in contemplation at that time.

By letter of 14th April 2020, Mr Light on behalf of the Workers, wrote to Mr Stefaan Vansteenkiste CEO of DRL, expressing concern about the way staff were being informed of what was happening. In a letter of same date to Mr Bebbington Managing Director DRIL, he raised the same issues and also noted that “no attempt was made to convene a conference call with members of the Debenhams national union team”. It is not disputed that this team was in place and operational at the relevant time, and from time to time in the past would have had meetings with management.

 Mr Light responded to the letter from the Respondent of the 14th April 2020, on Wednesday 15th April 2020, reminding them of their obligation under the legislation to engage in meaningful consultation and noting that such engagement had not occurred at that point in time.   Later that evening Ms O’ Connor responded by email advising that it was anticipated that an application would be made, and a provisional liquidator appointed either on the Thursday or Friday of that week. The email went on to confirm that the company could attend a first consultation meeting to be held via zoom on Friday 17th April at 11.00am.

 On 16th April 2020 Mr Bebbington Director, wrote to all staff confirming that provisional liquidators had been appointed by the High Court that day, and advising that collective consultation with the Union representatives would take place, with the first meeting arranged for Friday 17th April at 11.00am.

 The first consultation meeting between the Respondents and the Mandate national team took place by zoom on the 17th April 2020. Miss O’Connor was in attendance at the meeting and gave an update from the Respondent’s perspective. She acknowledged that there had been a lack of communication over a number of days and apologized for that delay. Ms. O’ Connor went on to say that in normal circumstances and following advice from their lawyers, what should have happened is that the provisional liquidators would be appointed, and on that day, or the day after, consultation on the proposed collective redundancies would have commenced.

  Mr. Deegan Director of DRIL, set out the reasons why they took the action they did. He stated that on 6th April 2020, the DRIL Board met to discuss the fact that DRL intended to appoint Administrators. At a further meeting on the 8th April 2020, they took the decision to write to DRL, and officially asked them to confirm their position in relation to supporting the Irish firm and requested a reply by close of business. Later that same evening they received a response stating, “We refer to your letter dated 8th April 2020 and write to confirm that neither DRL (nor any administrator appointed to it) nor any other entity, will be in a position to provide financial support to DRIL going forward”.

 At a Board meeting on the morning of 9th April 2020, the decision was taken to cease trading and that DRL in its capacity as sole shareholder would be asked to take immediate steps to petition the High Court to wind up the company and appoint a liquidator.

Mr. Andrew O’ Leary one of the provisional liquidators, set out the role of the liquidator in situations like this.

 On the 20th April 2020, Mr Light wrote to Mr Deegan Director advising that the Unions position was that in the event of redundancies being deemed necessary in the future, they were seeking that the redundancy terms of the existing and previously applied collectively negotiated agreement be applied. On the 22nd April 2020, Mr Light received a letter from Mr Stefaan Vansteenkiste CEO DRL, stating amongst other things, that in respect of the online business Debenhams .ie, that the revenues from same are retained by DRIL and not the UK business.

 On the 23rd April 2020, Mr Light received a letter from Mr O’ Leary provisional liquidator setting out the information required under section 10 (2) (a) to (f) of the Act and suggesting a further consultation meeting during the week of 27th April 2020.

 On the 23rd of April 2020, Workers received correspondence from the provisional liquidator confirming they had been appointed, and advising “This means the Company will enter into a 30-day consultation period with representatives on behalf of employee. This process commenced with an initial meeting that took place on Friday 17th April between representatives of both Mandate and SIPTU and I. “

 The second consultation meeting took place on 28th April 2020. The meeting was informed that the company were back in Court the following Thursday at which point the liquidators would be confirmed.  Mr. Light Mandate Trade Union, pointed out that they were now 10 days away from the original appointment, and his members were looking to get information in respect of what assets formed part of the liquidation such as stock etc.

 The liquidators confirmed that things were still at a high level in terms of information, and they were still in talks with the UK company in respect of getting clarification around issues such as ownership of stock, leases, brand name and online site. The Trade Union queried if there had been engagement with landlords in terms of establishing if there was any inherent value in the leases, or if there was a possibility of savings on rents. They also queried if the profits from the online site could be retained by DRIL and raised the possibility of keeping some stores open to sell existing stock.  The liquidator stated that their role was to explore all possibilities, but in terms of the information available at that point in time, it was too early to know what option would be best.

 Mandate by letter of 5th May 2020, wrote to the liquidators and Mr Stefaan Van Steenkiste CEO, highlighting the shortfall in the information provided to date, in terms of the possibility of rents / rates restructuring, list of landlords, identifying the profit /loss making stores, whether Government funding arising from Covid could be accessed, and seeking an extension of the 30-day consultation period.  

 The third consultation meeting was held by zoom on the 7th May 2020.  At the start of the meeting Mr Light raised concerns about the fact they were two thirds through the consultation process, and the quality of the information they were receiving was less than complete. The liquidator identified the following areas that were forming the basis of his discussion with the UK business.

 Ownership of the website, the legal advice received by the liquidators was that it was owned by the UK entity and therefore not an asset of the liquidation.  However there still needed to be discussions about revenue apportionment.

 The stock currently in the Irish store. The UK are asserting that they own the stock the liquidator is seeking legal advice on that issue. 

Property leases, the leases are owned by a UK entity and DRIL are sitting in the stores as sub tenants and are therefore not in a position to assign the leases.  He went on to say there is no appetite within the UK business to open up/ support / fund the Irish business going forward.

 Taking all of the above into consideration the liquidator did not see a basis for extending the 30-day consultation process.

 He stated that without the stock, brand name and control of the leases it makes matters very difficult and there were no alternatives available. It was acknowledged that there was cash in the business estimated at €5 million. It was also confirmed that the most recent audited accounts were September 2018, and a copy of same would be provided to the Union.

Mandate wrote to the liquidator on the 11th May 2020, setting out six areas that they had sought information in respect of   1) Leases connected to Irish Stores, 2) current stockholding of DRIL 3) online business 4) financial data 5) landlords and 6) profit /loss making stores on the last date that the information was available.

Mr Light on behalf of Mandate informed the liquidator that he was putting them on notice that the workers were now in dispute with their employer and had commenced a ballot for industrial action. The letter went on to say that it was imperative that the information requested be provided as a matter of urgency and that a further meeting should be held week beginning Monday 11th May 2020.

 The Liquidator responded by letter of the same date and gave an update on the issues raised. A further update was issued by the liquidator in letter of 13th May 2020, where he confirmed that DRL and their administrators had clearly indicated that they were not in a position to progress discussions in relation to the preservation of operations at any of the Irish stores. He also set out the up-to-date position in respect of leases, current stock, landlords, profit/loss making stores, online business and set out some key financial challenges facing the company.

 A fourth consultation meeting was held on 15th May 2020, by zoom the liquidator confirmed that discussions in respect of the legal position around ownership of the stock were still ongoing. They were of the view that the stock belonged to the Irish business. The UK business had again confirmed they were not in position to support the Irish business. On that basis the liquidator saw no reason to extend the 30-day consultation and, in his opinion, to do so would be irresponsible. Mr Light on behalf of the Union stated that they were far from satisfied with the level of detailed information provided. He informed the meeting they had recently balloted for industrial action. By letter of 20th May 2020, the liquidator informed the workers that the 30-day consultation period had come to an end and that they were being made redundant.

 A fifth meeting was held but this was after the consultation period had expired and the letters of redundancy had issued to staff.

 Mr Kirwan SC submitted that any analysis of ss9 and 10 of the Act should begin with an overview of the relevant EU legislation, and noted that Article 2 of Directive 98/59/EC at paragraph 1 provides for consultation to begin when the Employer “is contemplating redundancies” and should be “in good time with a view to reaching an agreement”. This is reflected in the Act at s9(3) which requires that consultation is commenced “at the earliest opportunity”. The key issue that arises in this case is when the consultation process should have commenced.

It was Mr Kirwan SC submission that the consultation period should have started no later than the 9th April 2020, as it was clear from the correspondence referenced above, and opened to the Court that the Employer at that stage was clearly contemplating redundancies.  It is not disputed that at that stage the UK entity had confirmed it would not provide any more financial assistance, and the Board of DRIL, had taken a decision to ask their shareholder to make an application to the High Court to appoint a liquidator.

Mr Kirwan SC referred the Court to conclusion 2 of the Advocate General Opinion in Miriam Bichat v Aviation Passage Service (C-61/17) where she states that the Employer is under a duty to start the consultation process “when it becomes aware of the adoption of a strategic decision or change in activities which compels it to contemplate or to plan for collective redundancies”. Mr Kirwan submitted that it was accepted that the Court of Justice diverged from the Advocate General in its findings in that case, in that it took a narrower view of what a controlling undertaking was. However, the CJEU did not suggest that the Advocate General was incorrect as to when the timing of the consultation process should start.

Mr Kirwan SC, also opened the judgment of the CJEU in Akavan Erityisalojen Keskuslitto ry and \Others v Fujitsi Siemens Computers Oy (C- 44/08)  to the Court, which at paragraph 48 states that the consultation must be started by the employer “once a strategic or commercial decision compelling him to contemplate or to plan for collective redundancies has been taken” and goes on at paragraph 73 to confirm the fact that the employer does not have all the information to hand at that stage cannot delay the commencement of the process.

 In the Irish case of Tangey v Dell Products Limerick [2013] IEHC 622 Birmingham J held that the consultation requirement arises when a commercial decision is made which contemplates collective redundancies.

 Mr Kirwan submitted that it is clear from the caselaw, that the key consideration is not whether redundancies were taking place, but whether a decision had been made which required the contemplation of redundancies. It is clear from the sequence of events set out above, that in the case to hand, that occurred on the 9th April 2020.

 Against that background it is submitted that DRlL failed utterly to comply with its statutory obligations under s9. It failed from 9th April 2020 onwards, in that no meaningful consultation was engaged in by DRIL.  A zoom meeting was scheduled for 17th April 2020 a day after the liquidators were appointed and eight days after Mr Bebbington’s letter of the 9th April 2020 to all staff.

 Summary of Complainant’s witness evidence

 Mr Gerry Light, Mandate Trade Union, stated in response to a question from Mr Kirwan SC, that on the 6th April 2020 when he became aware of what was happening in DRL he had concerns about DRIL and contacted Ms O Connor but did not receive any response to his email. He confirmed that Mr Bebbington’s letter of the 9th April 2020 was sent to staff but was not sent to the Union as the representative body for the Workers.  The Union held a zoom meeting with its Debenhams national shop steward team to discuss the letters of 6th and 9th April 2020. At this stage members were very concerned.  He believed the letter from Mr Bebbington indicated that there were going to be job losses and that was why he referenced it in his letter of 10th April to the Respondent.

 In relation to the letter dated 14th April from Ms O’ Conner, Mr Light stated that he did not accept that it complied with the requirements of the Act. At the point that the letter issued, there had been no engagement with the Union and no information had been made available to the Union or the workers.

Mr Light confirmed he had written to Mr Bebbington as he had concerns about the letter that issued on the 9th April 2020, in that there was no mention of engaging with staff and or their representatives. He also responded to Ms O’ Connor’s letter of 14th April 2020, advising the Respondent of their legal obligations to their employees. Even though the formal notification had issued to the Union and the Minister there was no consultation.

 The Union were looking for the application for liquidation to be suspended to explore if there were other options and to allow the Respondent to comply with their legal obligations. The Respondent appeared to believe they did not have to consult until after the liquidator was appointed.

On the 15th April 2020 he received correspondence from Ms O’ Connor confirming proposed redundancies, and that the first consultation meeting would take place on 17th April 2020. The following day they were notified that two provisional liquidators had been appointed. 

In respect of the notes from the first consultation meeting Mr Light stated that he accepted that the notes captured in general what happened, but they are not an agreed minute. He noted that Ms O’ Connor’s introductory remarks seem to suggest that their obligations to consult only arose after the liquidators were appointed.  Mr Light stated that he did not accept that the Easter holiday period posed a problem. This should have been a high priority issue, and in the retail sector people were accustomed to working the holidays. The fact that meetings could be held by zoom made it easier to organise than trying to get people to attend in a particular location.

 Mr Light stated that he believed the information about stock was in the gift of the DRIL senior managers. He confirmed that the Union did not accept that the employer had met its obligations under ss9 and 10. As a precautionary measure on 20th April 2020, he had written to Mr Bebbington requesting that if there were to be redundancies it should be line with the terms of the previous agreement. He confirmed that in a letter he had received on 22nd April 2020, Mr Van Steenkiste CEO confirmed that the revenues from the online business would go to Ireland.

 In respect of the letter dated 23rd April 2020 from the liquidator he does not accept that it contains all the relevant information or complies with the requirements of the Act.

In response to a question from Mr Kirwan SC in respect of the second meeting on 28th April 2020, Mr Light stated that he wanted to get a handle on the assets so he could get a holistic view of the situation and formulate proposals. No additional information was provided at that meeting. He queried the cash on hand and requested that it be kept under constant review. He queried stock and was advised that the liquidators were trying to establish what stock was Debenhams and what was concessions. He also queried online sales as they believed this could be available as an asset going forward. They also had queries about the stores and the leases as to whether they could be leveraged.

By letter of 5th May 2020, he wrote to the liquidator identifying what they believed to be shortfalls in the information provided. They wanted to leave no stone unturned in terms of looking at possibilities.

 The third Consultation meeting took place on 7th May 2020. They were informed by the liquidator that the website was owned by the UK, and that there was still a question mark over ownership of the stock. The liquidator confirmed that the property leases were held by a UK entity, and the Irish shops were sub tenants so there was no value in them. The liquidator informed the meeting that they saw no reason to extend the consultation period. Mr Light stated that he asked for a copy of the most recent audited accounts and that at the end of the meeting he was still of the view that matters were still fluid.  

 The liquidators wrote to him on 11th May 2020, and set out the position as they understood it at that point in time in respect of website, stock, property leases, and the financial position of the company.  He also confirmed that there would be no extension to the 30-day consultation period.

Mr Light wrote to the liquidator by return on the 11th of May 2020, identifying what they believed was a shortfall in information being provided, and putting the liquidators on notice of a ballot for industrial action.  Mr O'Leary then wrote to Mr Light on the 30th of May 2020, setting out responses to the issues raised. Mr Light in his evidence, stated he was not happy with the response, and thought it would help if they could see the legal advice that the liquidators were relying on.

Mr Light stated at that point in time there was still uncertainty about the ownership of the online business, as initially the CEO of DRL had said ‘online’ belonged to the Irish business. Mr Light confirmed that the legal advice was not made available to them, nor were they provided with information on the current stockholding. It was his submission that without this information they were not in a position to put proposals forward.

The fourth consultation meeting took place on the 15th of May 2020, the liquidator confirmed that the legal position around stock ownership was still ongoing. Mr Light stated that he indicated that the information provided was not sufficient.  They had not been provided with information around the stock, they had requested a list of loss/profit making stores, and that had not been provided. They wanted more clarity around the ownership of the website and online business. He indicated that at the meeting he wasn't convinced that there wasn't some potential to exploring the landlord leases. It was his belief that the degree of openness and completeness required to meet the requirements for consultation were not met. By letter of 22nd of May 2020, the liquidator wrote to Mr Light, responding to different issues raised by the Unions.

 A fifth meeting was held on the 25th of June 2020, as the redundancies were being enacted. However, this meeting was outside of the consultation period.   While information was provided at that meeting about stock, the information was incomplete and the Unions ability to use it at that stage was fairly limited as the redundancies were enacted.

Under cross examination Ms Smith SC asked Mr Light to confirm if the date of 9th March 2020 on his letter to the Companies Registry Office (CRO) was correct or whether that should be 9th April 2020. Mr Light confirmed 9th of March 2020 was correct. It was put to Mr Light that at that time there was no suggestions of a voluntary strike off. Mr. Light replied that he was aware of the potential impact of Covid and the historical performances of Debenhams it was a precautionary letter. He accepted Covid was not in Ireland at that stage, but there was awareness about it in other countries. Mr. Light. accepted that the stores in Ireland did not cease trading until the 20th March 2020.

 Ms Smith SC put it to Mr Light that the 9th of April 2020 was a pivotal day in that it was the day that the DRIL Board passed the resolution and sent the letter to the parent company about winding up. Mr Bebbington wrote to staff on that date as well. Mr Light accepted that but stated that from the 10th of April until the 14th of April there was no engagement by management with the workers or their representatives.

 Ms Smith SC put it to Mr Light that the e-mail of the 14th of April 2000 from Ms O'Connor talks about the proposed redundancies and meets the requirements of s10 (2) of the Act in that it provides all relevant information relating to the proposed redundancies.  Miss Smith SC went through the relevant sub section (a) to (f) and Mr Light confirmed that those sections had been completed he also accepted that he had had phone calls with Ms O'Connor.

It was put to Mr Light that he also had several calls with Mr O’ Leary the liquidator, he accepted that.  He confirmed that there were four consultation meetings on zoom, and in the course of the meetings Mr O'Leary had offered to answer all questions.  He also confirmed that Mr O'Leary had not refused to answer questions. Mr Light stated that Mr O'Leary did not always have the relevant information to respond to the questions, but he accepted that there was constructive engagement.

 In response to a question from Ms Smith SC, Mr Light confirmed that he had received a copy of the legal pleadings in respect of the application for the appointment of liquidators, and those papers included the latest audited accounts.

Ms Smith SC took Mr Light through the various correspondence and minutes of meetings. She put it to him that the Union had not put forward any proposals, and had only raised issues about securing revenue for redundancies.

Mr Light stated that the information they had received was not sufficient to allow them to formulate alternative proposals, and the Unions were making it clear that they expected that if redundancies were necessary the existing arrangements in respect of same would be honoured.

Ms Smith SC put it to Mr Light that he was aware that the stock was security for the benefit of other creditors and therefore could not be an asset of the liquidation. Mr Light stated that was never formally put forward by the liquidators or the employer, and he believed he was obliged to explore every possibility.

It was then put to Mr Light that the landlords did not agree to their details being given to the Union, and that there was no benefit to exploring that issue as the leases were held by the UK company. Ms Smith SC also put it to Mr Light that even though the Unions put forward potential solutions such as looking at government subsidies and EU subsidies that they would have known that following the High Court order the company could not trade.

Mr Light accepted that at the third meeting Mr O'Leary informed them that the websites belonged to the UK company, the Debenhams brand names belonged to the UK, and that they could not use that name, the leases were with the UK company and that they were still engaging over the stock. He felt they should explore all options, but to do so they needed all the information.

Mr Kirwan SC submitted to the Court that most of the facts in this case were not in dispute between the parties and stated that the Court had to consider the protections provided for in ss 9 and 10 of the Act, and the reason why they are there, which is to avoid collective redundancies if possible. If that's not possible, then to reduce the number of people affected, and or to mitigate the circumstances.

 He invited the Court to find that the obligations to the workers were from the 9th April 2020. Article 2(1) of the directive states the consultation should be in ‘good time’ and the Act states ‘earliest opportunity’. In the Futjitsu case the CJEU held at paragraph 49”… the answer to be given to the first question referred is that Article 2 (1) of Directive 98/59 must be interpreted to mean that the adoption, within a group of undertakings, of strategic decisions or of changes in activities which compel the employer to contemplate or to plan for collective redundancies give rise to an obligation on that employer to consult with worker’s representatives”.

 It is the Complainant’s submission that at the meeting of the 9th of April 2020, when the DRIL Board passed a resolution to ask the sole shareholder to make an application to put DRIL into liquidation and to seek advice from their solicitors, they were contemplating redundancies and the obligation to consult arose at that point.

 There was no communication with the workers or their representatives in respect of contemplating redundancies between the 9th and the 14th April 2020.  It was stated in evidence by Mr Deegan that normally Easter Sunday would have been the only day the shop would have closed.  In those circumstances there's no reason why the process could not have and should have started on the 9th of April 2020. The first meeting was held in the 17th of April 2020 that was an eight day delay which cannot be considered to be the earliest opportunity.

 Mr Kirwan SC said in respect of the number of claims before the Court, it is the Complainants position that there are four claims, two against DRIL and two against DRIL in liquidation. The legislation does not prevent two breaches by an employer and employment law cannot be set aside at the altar of company law.

Summary of Respondent’s submission

Ms Smith SC on behalf of the Respondent submitted that there is only one legal entity and that the second set of complaints are duplicate claims. Section 595 of the Companies Act 2014, supports her position that there is only one entity, and that once the company enter into liquidation, they are obliged to include the words “in liquidation” at the end of its name in all communications with third parties.  Any claims made by the Complainant as against the Company when it was known as Debenhams Retail Ireland are continuous and are against the same entity regardless of any legal requirement to append (In Liquidation) to the Company’s name. The complaints are against the same entity, in the same time period, therefore there can only be two complaints.

In respect of the substantive complaint Ms Smith SC stated that the Respondent does not dispute the timeline of events as set out by the Complainant. However, they do not accept that they breached s9 and or s10 of the Act.  Ms Smith submitted that it would have been known to Mandate as the representative of some of the workers that the DRIL part of the Debenham Group had been lost making and was placed in examinership in 2016.

 At a meeting of 24th March 2020 with DRL, the directors of DRIL asked the question about on-going support from the UK and were told there was no issue at that point in time. At the Board meeting on the 8th of April 2020, they did not know support was going to be withdrawn. DRIL had been loss making for years so withdrawal of support came out of the blue.

 By memo of 8th April 2020 a Director of DRL UK confirmed that they could not fund DRIL going forward. Therefore, DRIL was insolvent and could not trade. While it had not been profitable since 2016, it had the support of the parent company through loans. The losses it incurred were funded by loans from the UK company. Once the Board members became aware that DRIL was insolvent their obligations switched from their shareholders to their creditors.

At that time all the Irish stores were closed because of Covid. The 9th of April 2020 was holy Thursday, and a number of relevant events took place on that day. Firstly, a meeting of the Company’s Board of Directors was held to consider what actions the company should take in light of the parent company’s letter of 8th April 2020. The Board passed a number of resolutions including that it would write to the sole shareholder DRL, and request that they take immediate steps to petition the High Court to wind up the company and appoint a liquidator, and that a letter should issues to all employees informing them of the position.

 It was also recorded at the meeting that “the Board would consider and undertake to do the various requirements regarding collective redundancies under the relevant employment legislation (as per advice to be provided by William Fry) including the issuing of a notification to the relevant Government Minister.”

In line with the resolutions passed at the meeting the Board wrote to DRL recommending that DRL in its capacity as sole shareholder petition the High Court to wind up the Company.  Mr Rowley Administrator signed the petition to wind up DRIL. The company also informed employees of the recommendation that a liquidator be appointed.

The Easter bank holiday weekend fell on 10-13th April 2020, and the Company was still in full Covid lockdown. On 14th April 2020, DRL passed a written resolution that the Company be wound up. It authorised and directed the Company Directors to present a petition to wind up the company and seek the appointment of provisional liquidators.   On the 16th April 2020, the High Court appointed Mr Wallace and Mr O’ Leary as joint provisional liquidators on foot of an ex parte application. On the 30th April by Order of the High Court, Mr Wallace and Mr O Leary were confirmed as joint liquidators.  The Court also made a winding up order in respect of the Company on that day.

 In the pleadings submitted to the High Court a copy of which the Union had,  set out at paragraph 33, are the services that DRIL received from DRL and it also stated that all assets were already the subject of fixed and floating charges.  At the time of making its decision the High Court had a copy of the correspondence from the Union seeking to postpone the appointment of the liquidators.

 Ms O Connor Director, with responsibility for HR, wrote to the Unions on the 14th April 2020 notifying them of the proposed collective redundancies in line with s10 of the Act.  On the evening of the 15th April 2020, Ms O Connor issued an email calling the first consultation meeting for Monday 17th April 2020. The Provisional Liquidators were appointed on the 16th April 2020, and once provisional liquidators are appointed, management lose all their authority, the liquidator picks up same. Ms O Connor was retained by the liquidator to assist with the consultation and redundancy process.

 The meeting of 17th April 2020 was the first consultation meeting and in attendance were DRIL Directors, the provisional liquidator, Trade Union Officials and shop stewards. The meeting covered several issues including why a liquidator had to be appointed, the timeline of events, role of the liquidator, nature of liquidation process, overview of the financial status of the Company, update in relation to stock, online-trading, concessions and suppliers, and the consultation process in relation to the proposed collective redundancies.

By letter of 23rd April 2020 the joint provisional liquidators wrote to employees informing them of their appointment by the High Court and setting out the consultation process in respect of proposed redundancies. They also wrote to Mandate referencing the meeting of the 17th April as commencing the consultation process. On the 28th April 2020 a second consultation meeting was held. Many issues were discussed including that the provisional liquidators would return to Court the following week at which time they expected to be appointed as joint liquidators, queries in respect of the company’s assets, current cash reserves, level of stock held in stores, online trading and status of leases were all addressed. The issue of the possibility of reopening some stores was also raised and the possibility of a redundancy package. 

By letter of 5th May 2020, the joint liquidators wrote to the Department for Employment Affairs and Social Protection in relation to the proposed collective redundancies. Employees were informed by letter of 6th May 2020 of the fact that the High Court had confirmed the appointment of the liquidators.

 On 7 May 2020, a third meeting was held. The liquidator updated the meeting on the poor financial status of the company and the status of discussions with the UK business in respect of stock, website, leases and the fact that there was no appetite within the UK business to support the Irish business. The liquidator advised that he could see no basis for extending the 30-day consultation period and that they would be moving towards redundancies.

On 15th May 2020, a fourth consultation meeting was held. The liquidator confirmed that he saw no reason to extend the consultation process, and he answered questions in relation to the collective redundancy process.

By letter of 20th May 2002, the joint liquidators wrote to employees with notice of termination of employment on the grounds of redundancy.

 Mandate both in correspondence to the Respondent and at the consultation meeting had sought sight of legal advices that the joint liquidators had received in respect of a number of issues.  The Respondent does not accept that ss 9 or 10 of the Act requires that the company’s legal advice be provided as part of the consultation process.   The Complainant has not identified any case law that supports their contention that they had an entitlement to receive the liquidator’s legal advice.

Taking into account, the agreed chronology of events and timeline for same it is difficult to identify a potential claim in respect of s9.  The focus of the Complainant’s complaint appears to be in respect of   Section 9(3) which requires that consultation is commenced “at the earliest opportunity”. The relevant requirement under the Directive is that the consultation happens “in good time “.  Neither of those terms suggest an urgency.

In this case the Directors of DRIL, found out on the evening of the 8th April 2020, that the UK parent would not be providing funding going forward. The Respondents position is that the consultation process commenced on the 14th April 2020, when Ms O’ Connor sent the letter to the Union setting out the details as required under s10 of the Act.

Ms Smith submitted that all requirements set out in s10 of the Act were also complied with. It is important to note that the Act requires all details linked to the redundancy be provided. It does not state all details relating to the business. It is the Respondents submission that all details relevant to the redundancies were provided.

  Ms Smith SC submitted that the Fujitsu case can be read in two ways, paragraphs 44 and 45 refers to the dangers of triggering the consultation process to early and state

“Against an economic background marked by the increasing presence of groups of undertakings, that provision serves to ensure, where one undertaking is controlled by another, that the purpose of directive 98 / 59, which, as stated in recital 2 of its preamble, seeks to promote greater protection for workers in the event of collective redundancies, is actually achieved (Case C-27O/05  Athinaiki Chartopoiia [2007] ECRI-1499,paragraph 25).

Moreover, as the United Kingdom Government rightly observes, a premature triggering of the obligation two hold consultations could lead to result contrary to the purpose of directive 98 /59,  such as restricting the flexibility available to undertakings when restructuring , creating heavier  administrative burdens and causing unnecessary uncertainty for workers about the safety of their jobs”.

 The Respondent does not accept the Complainant’s position in respect of the Bichat case. It is the Respondents position that the CJEU did not follow the Advocate Generals opinion in that case.  It is not correct to say that the CJEU only disagreed with one part of the Advocate Generals’ opinion, therefor defacto the rest is accepted and can be followed.

Ms Smith SC stated that the Respondents went to the High Court to get liquidators appointed; a business can be wound up without doing this.  It was not feasible to suspend the liquidation application. The Respondent does not accept that there can be two claims against the one entity. Mr O Leary liquidator attended the first consultation meeting.   There can only be one obligation and it lies with whoever is in control at the relevant time.  The ‘earliest opportunity’ suggests you have to identity the opportunity, there was no delay, there was actually a flurry of activities to ensure everything was done at the appropriate time.

 On the 14th  April 2020, information was provided, on the  15th  April 2020, arrangements were put in place for the consultation meeting on the 17th  April  2020.  This all happened against a background where it had come as a shock that the parent company would no longer be providing funds. They had to await a resolution from the parent body, which happened on 14th April 2020. There were very limited opportunities to resolve the issue and reduce the number of redundancies.  The Unions were provided with material required by section 10 (2) of the Act which has to be looked at it in the context of 10 (3).  The ‘earliest opportunity’ refers to the distance from dismissal and not from the decision.

Ms Smith SC stated that the obligation  was on the employer to provide certain information for the purpose of consultation, it would appear that the submission on behalf the Complainant initially accepted the processes started on the 14th and they are now stating that it should have started on the 9th April 2020, this is only 5 days of a difference and it was over the Easter period.

 It's clear from the position of the Complainant that it is not disputed that there was engagement, however, there were limitations in respect of the information that was available to the liquidators. The legislation requires that the consultation takes place at the earliest opportunity and in any event at least 30 days before the termination of employment.

 The sequence of events in this case is that on the 9th April 2020, the DRIL Board make a decision, but it was contingent on the sole shareholder agreeing to go to the High Court, and seeking the appointment of liquidators. The response from the sole shareholder was not received until the 14th of April 2020. They expected the liquidators to be appointed on 14th April when that did not happen, they sent out the letter to staff. This was followed by a further letter on the 15th April 2020, setting up the first consultation meeting on the 17th April 2020.

Summary of Respondents witness evidence

Mr Geoff Rowley Administrator DRL

Mr Rowley informed the Court that he was chief executive of FRP advisors, a chartered certified accountant and licenced insolvency practitioner and that he acts as an administrator. He was appointed as joint administrator with Mr Massey to Debenhams Retail Limited UK and Debenhams property.

 The role of administrator in the UK is to see if you can rescue a company, see if you can achieve a better realisation of assets, and to look after the preferential creditors. He confirmed he was appointed a few weeks into the Covid lockdown, which had a severe impact on the trading ability of the company. In 2019, DRL, had gone through a restructuring and administration of the parent company, control of the company was vested with creditors. The role of the administrator is about the art of the possible taking into account the circumstances prevailing at the time. It was his evidence that the UK company provided support services such as buying, finance, IT&HR to the Irish Company, and the Irish records were held in the UK.

 DRL owned the brand name, and they wanted to reserve their rights in respect of the brand name, and branded stock. They believed they had a claim for a retention of title on branded stock in all the Irish stores. Both estates had to protect the rights of their shareholders. Ultimately, they reached an agreement on these issues. The issue of dealing with leases was a priority for the DRL, it was his understanding that all stores were deemed to be loss making, and there was no information to suggest there was any value in the Irish leases.

Mr Rowley claimed that he signed the resolution of 14th April 2023, and confirmed that support was withdrawn from the Irish entity by DRL on the 8th of April 2020. However, there was support for the operation of online facilities, banking facilities, just not financial support. He confirmed that the Irish liquidators looked for further financial support from the UK, but they were advised it could not be provided. Ultimately DRL was sold and all staff made redundant.

Under cross examination from Mr Kirwan SC, Mr Rowley accepted that the decision to seek to wind up the Irish company was made on the 9th April 2020. He stated the reason he signed the papers on the 14th April 2020, was because that was when the papers were given to him.  He confirmed he had no involvement in the consultation process, but he was in dialogue with the liquidators during April and May 2020. He confirmed that there was never an appetite to fund the Irish business as far as he was aware, and that by May 15th, 2020, the issue of ownership of the Irish stock had still not been resolved.

Mr Ian Deegan Director DRIL

Mr Deegan confirmed that he was a director from September 2019 to the date of liquidation.  He had worked there from September 1996 when it first opened.  His role was that of manager within the Irish business and after liquidation he worked in the UK as he still had responsibility for 14 stores in the UK. He was the director that swore the petition before the Irish courts as he lived nearest the Court. Mr Bebbington was a Managing Director of Debenhams retail Ireland and was his boss. Miss O'Connor another Director was also the HR partner.

Mr Deegan confirmed he attended the first consultation meeting, and that he would have known most of the shop stewards. He confirmed that Mr Wallace and Mr O'Leary were appointed as liquidators on the 16th of April 2020, which meant they took over from the Directors. He felt he had a responsibility to attend the meeting, as he had information the liquidators might not have. He attended the meeting, because he wants to explain to everyone what had happened. He accepts the note of the meeting reflects what he said.

In respect of the meeting with DRL on the 24th of March, he confirmed that they had discussed cash flow, and they had discussions about examinership, standing still, and liquidation.  He confirmed they had raised the issue but didn’t get a straight answer to the question as to whether or not the UK business, would continue to provide financial support. It was his evidence that they only got confirmation on the 8th of April at 21.35, that DRL would not be providing any further financial support to them.

All their back-office functions were provided by the UK, their stock came from the UK, so they knew they could not survive without the UK financial support. They also knew the UK was going to make the announcement about going into Administration, and they tried to tell their own managers before the news broke. It was then up to the store managers to tell their staff. 

 Mr Deegan stated that he knew consultation had to happen, but he understood they had to go to Court to get a liquidator appointed first. As this all happened over the Easter break the Courts did not open until the following Wednesday.

Under cross examination from Mr Kirwan SC, Mr Deegan confirmed that he had only been a director for seven months. When asked if he knew who owned the stock, he stated that he assumed it was owned by the UK company, and confirmed he had no knowledge in relation to the leases other than that they were paying rent. He stated that he knew the online stock came from the UK but understood that the revenue went to the Irish entity.

 In a follow up question from Mr Kirwan SC, Mr Deegan stated that he could not recall who told him that the Courts would not be open over Easter. He accepted that he assumed consultation would not start until the liquidators were appointed. He indicated that he was not sure when it started but knew the first meeting was held on the 17th April 2020. He confirmed that he was not sure whether that meeting was the start of the process, or the letter from Ms O'Connor sent on the 14th of April 2020.

Mr Deegan accepted that at the time of the letter of the 9th of April 2020, from Mr Bebbington to staff and book of petition papers of the same date, that they were contemplating collective redundancies at that stage. He also accepted the e-mail of the 14th of April 2022, to the Minister with the letter on behalf of the directors stated that there will be collective redundancies.

Mr Andrew O’ Leary liquidator

Mr O’ Leary confirmed that he was appointed liquidator with Mr Wallace. He confirmed that he had previously been involved in an examinership process with Debenhams and he knew Mr Light through that process. He confirmed that during the examinership process in 2016, material savings were made, and a redundancy package was agreed.

 However, that was a different process as management maintained their roles in examinership. In liquidation, liquidators replace the management team and directors. Mr O'Leary confirmed that he was appointed provisional liquidator on the 16th of April 2020, and that the powers of a provisional liquidators were set out in the Court order of that date. He confirmed that a lot of the management of the company was carried out in the UK, and that books, records, and documentation were held there.

 He confirmed that in terms of information that as liquidators, they had received all the information they required from the UK. He also confirmed that 27 staff were retained to assist with the liquidation process, and that Ms O'Connor assisted for a couple of weeks, but he couldn't recall if she had been formally retained in the HR role.

Mr O'Leary stated that he did understand the relationship between the UK and the Irish businesses and knew they were intertwined. He also knew from his previous engagement in examinership that the UK had the leases and finance was dealt with in the UK. It was his evidence that a decision was made to seek legal advice on a number of issues, including employment rights issues, and that they were provided with draft correspondence on the 10th of April 2020 in respect of those issues.

Mr O Leary accepted that his first engagement with the Unions was at the meeting on the 17th April 2020, he also accepted the meetings were long and that he would have spoken to Mr Light in between meetings. He confirmed that there was an issue around the stock as the directors of DRIL, were not clear who owned same. The administrators in England believed that the stock belonged to DRL.  As liquidators, they were looking to establish who owned it and what its value was as an asset. There were issues in relation to retention of title, money owed, pricing, and they had to work through these issues. The liquidators did receive legal advice in respect of some of these issues put believed it was not appropriate or necessary to share this legal advice with the Unions.

 Mr O'Leary confirmed that there was a floating charge which captured stock of the group as a whole and the value of that claim was far in excess of the value of the Irish stock. At the time the letters of termination went out to employees, the ownership of stock had not been resolved.

 As liquidators they had to take a number of factors into account when assessing the overall position in terms of any possible solutions, the key issues that prevented other solutions were that the leases were held by the UK, ownership of the stock was in dispute, brand name was owned by the UK, and the general environment at that time because of Covid, was not conducive to selling the business.

 It was their assessment that if they extended the consultation staff would have been worse off. They did have some engagement with landlords but there was outstanding rent of two to three million and this figure was growing. The landlords had indicated that they wanted vacant possession of the premises. They did look at reducing the number of stores, but it wasn't possible because no stores could open at the time due to Covid restrictions. Even if an individual store was profitable, it didn't matter if you didn't control the lease, didn't own the brand name or stock and didn't control the IT or other support services. These were all issues they had to factor in when considering options.

In response to a question under cross examination from Mr Kirwan SC, Mr O'Leary stated that he could not remember if he attended the petition hearing, but he would have read over the papers. In respect of the second consultation meeting held on the 28th of April 2020, he accepts that there was still information outstanding at that point, and that he did not raise the issue of the floating charge at that meeting. Mr O'Leary confirmed that originally the liquidator and the CEO thought the Irish company owned the website but by the third meeting it was confirmed that the website was in fact owned by the UK entity. He accepted that it was reasonable for Mr Light to ask further questions and he confirmed that as of the 13th of May 2020, the position re stock had not yet been bottomed out. In response to a question from Mr Kirwan SC as to whether he had explored transferring the website domain to the DRIL, Mr O'Leary stated the UK entity was not interested in doing that as it was generating revenue for the UK.

 The applicable law.

 Section 9 of the Act sets the obligation on the employer in respect of consultation as follows.

9. Obligation on employer to consult employees' representatives

(1) Where an employer proposes to create collective redundancies, he shall, with a view to reaching an agreement, initiate consultations with employees' representatives […]

(2) Consultations under this section shall include the following matters—

(a) the possibility of avoiding the proposed redundancies, reducing the number of employees affected by them or [mitigating their [consequences] by recourse to accompanying social measures aimed, inter alia, at aid for redeploying or retraining employees made redundant],

(b) the basis on which it will be decided which particular employees will be made redundant.

(3) Consultations under this section shall be initiated at the earliest opportunity and in any event at least 30 days [before the first notice of dismissal is given].

Directive 98/59 EC states as follows

Article 2

1, Where an employer is contemplating collective redundancies, he shall begin consultations with the workers' representatives in good time with a view to reaching an agreement.

2. These consultations shall, at least, cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences by recourse to accompanying social measures aimed, inter alia,at aid for redeploying or retraining workers made redundant.

Member States may provide that the workers' representatives may call on the services of experts in accordance with national legislation and/or practice.

3. To enable workers' representatives to make constructive proposals, the employers shall in good time during the course of the consultations:

(a) supply them with all relevant information and

(b) in any event notify them in writing of:

(i) the reasons for the projected redundancies;

(ii) the number of categories of workers to be made redundant;

(iii) the number and categories of workers normally employed;

(iv) the period over which the projected redundancies are to be effected;

(v) the criteria proposed for the selection of the workers to be made redundant in so far as national legislation and/or practice confers the power therefor upon the employer;

(vi) the method for calculating any redundancy payments other than those arising out of national legislation and/or practice.

The employer shall forward to the competent public authority a copy of, at least, the elements of the written communication which are provided for in the first subparagraph, point (b), subpoints (i) to (v).

4. The obligations laid down in paragraphs 1, 2 and 3 shall apply irrespective of whether the decision regarding collective redundancies is being taken by the employer or by an undertaking controlling the employer.

In considering alleged breaches of the information, consultation and notification requirements laid down by this Directive, account shall not be taken of any defence on the part of the employer on the ground that the necessary information has not been provided to the employer by the undertaking which took the decision leading to collective redundancies.

Article 3

1. Employers shall notify the competent public authority in writing of any projected collective redundancies.

However, Member States may provide that in the case of planned collective redundancies arising from termination of the establishment's activities as a result of a judicial decision, the employer shall be obliged to notify the competent public authority in writing only if the latter so requests.

This notification shall contain all relevant information concerning the projected collective redundancies and the consultations with workers' representatives provided for in Article 2, and particularly the reasons for the redundancies, the number of workers to be made redundant, the number of workers normally employed and the period over which the redundancies are to be effected.

[Where the projected collective redundancy concerns members of the crew of a seagoing vessel, the employer shall notify the competent authority of the State of the flag which the vessel flies.]

2. Employers shall forward to the workers' representatives a copy of the notification provided for in paragraph 1.

The workers' representatives may send any comments they may have to the competent public authority.

Article 4

1. Projected collective redundancies notified to the competent public authority shall take effect not earlier than 30 days after the notification referred to in Article 3(1) without prejudice to any provisions governing individual rights with regard to notice of dismissal.

Member States may grant the competent public authority the power to reduce the period provided for in the preceding subparagraph.

2. The period provided for in paragraph 1 shall be used by the competent public authority to seek solutions to the problems raised by the projected collective redundancies.

3. Where the initial period provided for in paragraph 1 is shorter than 60 days, Member States may grant the competent public authority the power to extend the initial period to 60 days following notification where the problems raised by the projected collective redundancies are not likely to be solved within the initial period.

Member States may grant the competent public authority wider powers of extension.

The employer must be informed of the extension and the rounds for it before expiry of the initial period provided for in paragraph

4. Member States need not apply this Article to collective redundancies arising from termination of the establishment's activities where this is the result of a judicial decision.

 The Companies Act 2014, at section 595 sets out what a company in liquidation must do in respect of documentation issuing during the process as follows;

Section 595.

(1) Every invoice, order for goods or business letter issued by or on behalf of—

(a) a company that is being wound up, or

(b) a liquidator of such a company, being a document on or in which the name of the company appears, shall contain a statement that the company is being wound up.

(2) Subsection (1) is in addition (in cases where a company is in receivership) to the obligations of the receiver of the property of the company under section 429.

(3) Every invoice, order for goods or business letter issued by or on behalf of—

(a) a company to which a provisional liquidator has been appointed,

(b) a provisional liquidator of the company, or

(c) a receiver of the property of such a company, being a document—

(i) on or in which the name of the company appears, and

(ii) issued during the period of office of the provisional liquidator as such provisional liquidator, shall contain a statement that a provisional liquidator has been appointed to the company.

(4) Any website of a company that is being wound up, and any electronic mail sent to a third party by, or on behalf of, such a company, shall contain a statement that the company is being wound up (and such a statement on a website shall be in a prominent and easily accessible place on it).

(5) Where the winding up of a company commences within one year after the date on which the company has changed its name in accordance with this Act, the former name as well as the existing name of the company shall appear on all notices and advertisements in relation to the winding up and in any website of the company and in any electronic mail sent to a third party by, or on behalf of, it.

(6) If default is made in complying with subsection (1), (3) or (other than a case dealt with by subsection (7)) (5)—

(a) the company concerned and any officer of it who is in default, and

(b) any of the following persons who knowingly and intentionally authorises or permits the default, namely, any liquidator of the company and any receiver, shall be guilty of a category 3 offence.

(7) If default is made in complying with the requirement under subsection (4) or (5) concerning the company's website, the company concerned and any officer of it who is in default shall be guilty of a category 3 offence.

(8) If default is made by a company, or any person acting on its behalf, in complying with the requirement under subsection (4) or (5) concerning electronic mail, then—

(a) in every case, the company and any officer of it who is in default, and

(b) where the default is made by a person acting on the company's behalf, that person, shall be guilty of a category 3 offence.

(9) In this section “third party” means a person other than—

(a) an officer or employee of the company concerned, or

(b) a holding company or subsidiary of the company or an officer or employee of that holding company or subsidiary.

Discussion

 The Court decided to firstly consider the number of cases properly before it.  In coming to its decision on this issue, the Court took into account the submissions of the parties, the acceptance by the Complainant that at all material times there was only one legal entity, the relevant section of the Company’s Act 2014, and the caselaw opened to it.  The Court noted that liquidators when appointed replace the Directors/ management team and assume the responsibilities that previously rested with them. The responsibilities start with the management of the Respondent and continue for the liquidator. The CJEU case of “Claes v Landsbanki Luxembourg SA Case C-235/10” states as follows

“In an insolvency, the legal personality of the establishment whose dissolution and winding up has been ordered by a judicial decision exists for limited purposes only, in particular for the requirements of that procedure and until publication of the accounts for the closure of the liquidation procedure. Nevertheless, such an establishment has a duty, up until the moment when its legal personality definitely ceases to exist, to fulfil the obligations incumbent on employers under Articles 2 and 3 of Directive 98/59.”  

 This supports the contention that the legal identity of the Company continues and must fulfil its legal obligations. It is not disputed that DRIL did not cease to exist at the point the liquidators were appointed, and that the adding of the words ‘in liquidation’ to DRIL’s name is a requirement of Company Law and in particular s595.

 Taking all of the above into account the decision of the Court is that there are two cases properly before the Court and that the other two cases against the liquidators are duplicate cases.

 In respect of the substantive issue a breach of s9 of the Act, it is accepted by the parties that the main facts in this case as set out above are not in dispute. The three key issues for the Court to decide in respect of the alleged breach of s9 of the Act are.

(i)When did the consultation commence? 

(ii)Did the consultation start ‘in good time’/earliest opportunity, as required by the      Directive/ Act.

(iii)When should the consultation have commenced.

(i) It is not in dispute between the parties that the first consultation meeting took place on the 17th April 2020. The Complainant submits that was the start of the consultation process. The Respondent submits the letter from Ms O’ Connor dated 14th April 2020 commenced the consultation process as it provided the information required under the Act. The liquidators in their correspondence of 23rd April 2020, acknowledges that the consultation started 17th April 2020 and in correspondence to the workers reference the commencement of consultation process on that date.

 In Ms O’ Connor letter of 14 April 2020, she references proposed redundancies, that all employee roles are proposed for redundancy, and goes on to provided information as required by s10(2) of the Act.  There is no mention of consultation as provided for under s9 of the Act in that letter.  On the same date Mr Light writes to the CEO DRL, and Mr Bebbington Managing Director DRIL, highlighting the lack of communication from the Respondent, and indicating that the Union were available to meet at short notice. He also emailed Ms O’ Connor on the 15 April 2020, raising the fact that there has been no consultation up to that point with the employees, and reminding her of the Respondent’s responsibility under the Act to consult with the Workers. By email of the 15th April 2020, Ms O’ Connor confirmed that the Respondent could attend the first consultation meeting on Friday 17th April,2020.  On the 16th of April 2020 Mr Bebbington wrote to all staff stating, “The appointment of the Provisional liquidators allows us to progress to the next stage which will involve collective consultation with your union representative.”

It is clear to the Court from that correspondence that the Respondent at that point is not disputing the fact that consultation has not started but is indicating that consultation will commence on the 17th April 2020. The statement by Ms O’ Connor at the meeting of the 17th April 2020 that there has been “radio silence “in terms of communication between the Respondent and the workers from when they received the letter on the 9th April to the meeting on the 17th April 2020, further supports that position.  Finally, it is clear from the documents opened to the Court, that the Directors of the Respondent and the liquidators in their correspondence and engagements, with the Union and the employees, all acted in a manner that supports the Complainant submission that the consultation process commenced on the 17th April 2020.  The Court having considered the relevant facts finds that the consultation process commenced on the 17th April 2020.

(ii)  The Court having decided that the consultation process commenced on the 17th April 2020, then went on to consider the next issue, whether, the consultation process started ‘in good time’/earliest opportunity, as required by the Directive/ Act. In considering this issue the Court took into account the sworn evidence, correspondence, caselaw and submissions of the parties.

 On 8th April 2020 the Company’s sole shareholder DRL sent a letter to the Respondent advising that “neither Debenhams Retail Limited (in Administration) or any administrator appointed to it) nor any other entity will be in a position to provide financial support to Debenhams Retail (Ireland) going forward.”  On the morning of the 9th April 2020 the Board of DRIL met and resolved that the Company could not keep trading as a going concern, that the Company would cease trading from all of the Company’s stores with immediate effect, that they would issue a letter to DRL as sole shareholder requesting that they petition the High court to wind up the company.  The decision to ask the sole shareholder to petition the High court to wind up the company suggests that a commercial decision was made at that time which compelled it to plan for collective redundancies. In its letter of 9th April 2020 to the Directors of DRL it states “Finally, as we have now made a decision to cease trading, we need clarity and confirmation……”  . At the meeting it was also resolved that a letter would issue to employees informing them of the position and that Ms O’ Connor would contact the relevant Trade Unions and advise them.

Paragraph six point 1.10 of the minutes of that board meeting state “the board would consider and undertake to do the various requirements regarding collective redundancies under the relevant employment legislation (advice to be provided by William Fry), including the issuing of a notification to the relevant government minister”

This all points to the Respondent at that time being aware of their responsibilities under the Act and being aware that collective redundancies were a real possibility. An email provided to the Court shows the Respondent before lunchtime the next day had received draft documents from their legal advisers in respect of collective redundancies and the statutory requirements. It is difficult to see how at that point the Respondent could not be considered to be contemplating redundancies as the minutes of the board meeting along with the evidence of Mr Deegan dispel any notion that a decision had not been made at that point that could result in collective redundancies.

In the Fujitsu case the CJEU states at paragraph 48

“It must therefore be held that, in circumstances such as those of the case in the main proceedings,  the consultation procedure must be started by the employer once a strategic or commercial decision compelling him to contemplate or to plan for collective redundancies has been taken.”

Paragraph 49 states  “in those circumstances the answer to be given to the first question referred is that Article 2(1) of Directive 98 / 59 must be interpreted to mean that the adoption, within a group of undertakings of strategic decisions or of changes in activities which compel the employer to contemplate or to plan for collective redundancies gives rise to an obligation on the employer to consult with the workers representatives.”

 It is accepted by the parties that the Respondent was in a precarious position at that point in time. The legislation is also clear that the consultation should take place at the earliest opportunity and that the consultation should be with a view to reaching an agreement. There was a gap in time between the decision to write to the sole shareholder and proceeding to the hight court.  In order for there to be any possibility of reaching agreement it would seem that the consultation should have commenced at that point in time where it had become clear that collective redundancies   were going to be a feature. The correspondence suggests that was the 9th April 2020.

 The submissions by the Respondent that because these events happened over the Easter period that this somehow contributed to any delay that might be perceived does not stand up to scrutiny.  It was accepted that in the retail sector the only day in normal times that the shop would have been shut was Easter Sunday and therefore the other days would have been normal working days. The submission that the delay arose because the Courts were closed over the Easter seems to be based on an incorrect assumption that the liquidator had to be appointed before the consultation could began.  The Court having considered all of the above concludes that the consultation did not commence in good time and or at the earliest opportunity.  By delaying the consultation until after the liquidators had been appointed the Respondent limited the options available in terms of coming to an agreement.

(iii) The final issue for the Court to consider having decided that the consultation did not happen in good time or at the earliest opportunity, is when should the consultation have commenced. It appears to the Court that the earliest opportunity to commence consultations was the 9th April 2020, after the Board passed the resolutions that the Company would cease trading. It is clear from the caselaw that there is no requirement on the Respondent to have all relevant information available before commencing the consultation process. Based on the documents opened to the Court and the sworn evidence of Mr Deegan it appears that the Directors were of the view that the consultations did not have to happen until after the liquidators were appointed. Were this to be true it would defeat the purpose of the Act, as the options available for consideration narrow considerably once liquidators are appointed and the Directors lose control of the company. The Court notes that the difference between commencing consultation on the 9th April and the 17th April 2020 could be argued to be only eight days and in fact only seven working days in that particular period in that sector. However, in the circumstances of this case, taking into account the precarious position of the Respondent, by not commencing consultation until the 17th April 2020, at which time the provisional liquidators had been appointed, the impact was that the available options had been narrowed as the Court had agreed to the commencement of the process of winding up the Company.   

 The Court having considered all of the above finds that the consultation should have started on the 9th April 2020 and the fact that it did not commence until the 17th April 2020 means the Respondent did not comply with the requirements of the s9 of the Act.

 Decision

 For the reasons set out above, the Court finds that while the Respondent did engage in consultation for thirty days prior to the notice of redundancy issuing, they failed to hold meaningful consultations in good time and that in waiting until the liquidator was appointed the available options had narrowed significantly.  The Court finds that this constitutes a breach of s9 of the Act.

 The Court Decides that the appropriate compensation is four weeks’ pay. The decision of the Adjudication Officer is upheld.

The Court so Decides.

	Signed on behalf of the Labour Court
	Louise O'Donnell
AR	______________________
10 April 2024	Deputy Chairman

NOTE

Enquiries concerning this Decision should be addressed to Aidan Ralph, Court Secretary.