Manchester Employment Tribunal has awarded a 90-day protective award to ex-employees against the two Austin Reed companies, AR Realisations 2016 Limited and ARG Realisations 2016 Limited.
This follows a failure by the companies to properly inform and consult employees in their main offices at Thirsk and London in the lead up to the companies’ insolvency in April 2016.
The insolvencies resulted in over 1,200 redundancies at Austin Reed in its stores and offices, between April and August 2016. The Employment Tribunal accepted that both employers had completely failed to warn, inform and consult employees in advance of the insolvency, despite the fact that the need for redundancies was obvious given the companies’ severe financial difficulties.
Their financial problems had been occurring over a significant period with failures to pay rent, VAT, suppliers and a large drop in retail sales.
Austin Reed is one of the UK’s best known and longstanding menswear retailers.
David Sorensen of Morrish Solicitors LLP who represented the successful employees stated “sadly, this is another example of employers experiencing a fall in sales and suffering financial difficulties that fail to inform and consult their employees about the difficulties, meaning that the resulting insolvency caused a shockwave and had a massive impact on the employees and their families. By ordering a protective award for each affected employee it sends a warning to employers to consult employees and provides the employees with some compensation”.