Lawyer awarded £44k after liquidation interrupted redundancy

Monday 19 February 2024

The senior legal counsel employed by the legal arm of part of a stricken asset management consultancy firm has been awarded more than £44,000 after his ongoing redundancy consultation was brought to an abrupt end when the business went into liquidation.

While Myles Flint’s claim of unfair dismissal against MJ Hudson Services (Jersey) Limited was unsuccessful, the Employment and Discrimination Tribunal upheld claims for damages in respect of unpaid wages, holiday pay, failure to give notice and redundancy pay.

Mr Flint had worked as a senior legal counsel for nearly 10 years, until he was told his job was at risk of redundancy in February 2023.

He followed up with an email regarding alternative roles he could undertake, followed by a further one setting out a potential redundancy package, which received an acknowledgement but not a proper reply.

He then attended an online meeting on his redundancy but "no progress was made" because his employer did not attend, and no "substantive response" was received in response to two follow-up emails

Mr Flint continued to be paid until June, but did not receive payment for July 2023. When he sent a text message to his boss threatening legal action on the final day of the month, he received an email terminating his employment without notice.

The business was then put into insolvent liquidation on 11 August.

He subsequently sought compensation for unfair dismissal in the Employment and Discrimination Tribunal. He alleged that his employer was aware of a company debt and intention to initiate a creditors' winding up – and therefore the need to terminate his employment – "well in advance" of actually dismissing him.

The company argued to the Tribunal that it had no choice but to cease trading and end all employment contracts due to sudden funding withdrawal. Not doing so, and continuing to incur costs, may have been a breach of the Companies (Jersey) Law 1991, it said.

The Tribunal – chaired by Hannah Westmacott – found that the dismissal process was fair.

Mr Flint's complaint about the "delay between being warned of the dismissal and the dismissal occurring" was described as "unusual" by Mrs Westmacott in her judgment, "as complaints normally arise if the redundancy process is rushed and employees are dismissed too soon."

"In this case, the Respondent appears to have left it as long as possible before dismissing the Claimant and continued to pay him for at least four months while he was not working and when he was on notice of redundancy," she said.

She said she had "not seen sufficient evidence" to suggest that the employer acted in a certain way to avoid paying Mr Flint – in fact, she noted that, and the Respondent expedited the redundancy process and dismissed the Claimant at the end of February 2023, paying his redundancy and notice pay at this stage, this would have amounted to less than the Claimant's wages from March to June 2023, which were paid while he was employed by but not undertaking any work for the Respondent."

She did state that "things could have been done differently" – such as giving "more substantive responses" to the claimant's proposals – but nonetheless did not find any unfairness in the dismissal process.

Despite the failure of his unfair dismissal claim due to the company's insolvency, Mr Flint received compensation for various other issues arising from the termination of his employment.

MJ Hudson Services (Limited) accepted claims against it for unpaid wages for July, and failure to give notice and redundancy pay in full.

The Tribunal awarded him £26,010 for failure to give notice, saying that he should have received nine weeks' notice of dismissal, with remuneration calculated based on his rate of pay immediately before the notice was given.

As his weekly pay was £2,000, he was entitled to £18,000 for the notice period, with an additional £8,010 awarded.

The Tribunal awarded Mr Flint £8,670 for one month's worth of unpaid wages. The Tribunal judgment noted that he did not do any work during this time but that "there is no argument that he was not willing and able to undertake any work if asked."

The tribunal also upheld Mr Flint's entitlement to a redundancy payment of £7,740, based on his nine years of service, and calculated at one week's pay for each year of employment.

The employment law states that the amount of a redundancy payment shall be calculated by allowing one week's pay for each year of employment during the period, ending with the effective date of termination, in which the employee has been continuously employed.

But the law also says that the weekly pay amount should not exceed the most recent figure for the mean average weekly earnings published by Statistics Jersey at least one month before the effective date of termination – this limited the weekly pay to £860.

Following the Employment Law, the amount of the payment is calculated by allowing one week's pay per year of employment, which in Mr Flint's case was nine years.

On holiday pay, Mr Flint claimed he was owed 7.5 days’ holiday, while the respondent asserted that he was only owed four days' worth.

The Tribunal found that Mr Flint, who earned £400 per day, was entitled to 2.5 days of holiday for the 2023/24 year which equated to £1,000, and he was entitled to 1.5 days of holiday for the previous year which equated to £600. 

The overall award came to £44,020, and was confirmed in a judgment handed down at the beginning of this month.

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