Carpet factory pays the price for lack of consultation

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Bosses at a carpet factory who failed to consult with workers before making them redundant have been ordered by a tribunal to pay out £160,000.

The BBC reports that the 38 workers at Ayrshire-based First Textile Flooring Ltd returned from holiday to be told the company had ceased trading. All were members of the Scottish Carpet Workers Union.

Union secretary Peter Bell, a machine operator at the firm for 35 years, told the tribunal he had received a call on July 14, 2005, from a firm of chartered accountants telling him that an administrator had been appointed and the firm would be closing at 5pm that day.

There had been no prior consultation with the union or any of the employees.

Tribunal chairman Stuart Watt said: “In this case, the tribunal are satisfied that the respondents made no attempt whatsoever to comply with their statutory duty to consult.”

Describing the failure as “extremely serious”, the tribunal awarded the maximum protective award of 90 days’ pay to each employee, ranging from £2,582 to £10,710.

Protective awards are made under section 189 of the Trade Unions and Labour Relations (Consolidation) Act 1992, where the requirements of section 188 have not been met.

Section 188 requires employers who are proposing to make more than 20 employees redundant within 90 days to embark on consultations with representatives at least 30 days before the first of the dismissals takes effect.

The consultation, which should take place with a view to reaching an agreement, should include:

  • Ways of avoiding the dismissals.
  • Ways of reducing the numbers to be dismissed.
  • Ways of mitigating the consequences of the dismissals.

In addition, the employer must also provide the representatives with certain written details, such as the reasons for the proposals.

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