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In 2020, Debenhams announced the closure of all its stores in Ireland, with the loss of over 1,000 jobs. A collective redundancy process took place and a highly publicised dispute regarding redundancy pay which led to the picketing of Debenhams’ premises for just over 400 days. A settlement on redundancy payment terms was ultimately reached in May 2021.
Almost 800 of the employees involved in the process brought complaints to the Workplace Relations Commission (WRC) under sections 9 and 10 of Protection of Employment Acts, which govern an employer’s obligation to provide information to, and consult with, employee representatives in a collective redundancy scenario.
Section 9 of the Protection of Employment Acts provides that an employer (or responsible person[1]) must initiate consultations with employees’ representatives where it proposes to create collective redundancies. Such consultations must be initiated at the earliest opportunity and in any event at least 30 days before the first notice of dismissal is given[2].
Section 10 of the Protection of Employment Acts provides that an employer (or responsible person) must supply the employees’ representatives with all relevant information relating to the proposed redundancies and sets out a non-exhaustive list of information which must be included.
A breach of section 9 or 10 may constitute an offence and where an employee brings a claim, they may be awarded such amount as the WRC (or Labour Court on appeal) deems just and equitable having regard to all the circumstances, up to a maximum of four weeks’ remuneration in respect of either breach.
What happened in this case?
On 9 April 2020, the board of management of Debenhams Ireland decided to cease trading in response to confirmation from Debenhams UK that they would no longer be in a position to fund the Irish operation. Staff were notified of this development on the same date. The Easter bank holiday weekend then followed from Saturday 11-Monday 13 April 2020. On Tuesday 14 April 2020, the administrators of Debenhams UK directed the board of directors of Debenhams Ireland to seek the appointment of provisional liquidators. Also on 14 April 2020, a letter issued to staff of the Irish operation addressing the requirements of section 10, but making no reference to consultation. On Thursday 16 April 2020 the High Court appointed joint provisional liquidators and a first consultation meeting took place on Friday 17 April 2020. Further consultation meetings were held and notice of dismissals eventually issued on 20 May 2020.
After almost 800 employees lodged complaints in the WRC, it was agreed a “test case” would be heard, in which Ms Crowe was the complainant.
Ms Crowe claimed that Debenhams had breached its obligations in the manner in which it conducted the information and consultation process, in particular that consultation should have commenced sooner and it had failed to meaningfully consult with employee representatives in what was ‘in reality a tick box exercise’ and that the information which had been provided in response to requests was ‘totally inadequate’ and made it ‘impossible to craft any meaningful proposals to limit the scale of the job losses and/or limit the catastrophic impact on staff’.
What did the WRC decide?
The WRC found that consultation commenced on 17 April 2020, but that it should have commenced in good time and at an early stage, which was no later than 9 April 2020. It commented that “in good time” meant that there was an imperative to start the process on or about the 9 April 2020 and the delay until the 17 April 2020 was material in narrowing potential options to reduce and mitigate the consequences of the intended collective redundancies. It awarded Ms. Crowe the maximum four weeks’ remuneration.
It also concluded that information which had been requested by the trade union was relevant, that it was not provided and that not having that information frustrated the trade union’s capacity to make constructive proposals. The WRC also awarded four weeks’ remuneration to Ms Crowe in respect of that breach.
What did the Labour Court decide?
The Labour Court, on appeal, agreed with the WRC that the consultation did not commence in good time and/or at the earliest opportunity. The Labour Court was of the view that the earliest opportunity to commence consultations was 9 April 2020, after the board decided that the company would cease trading. While the company did engage in consultation for 30 days prior to the first notice of redundancy issuing, the Labour Court was of the view that it failed to hold meaningful consultations in good time and upheld the decision of the WRC and its award of compensation in this regard.
In terms of the alleged breach of section 10, the Labour Court took a different view to the WRC on this point and found that the issues raised by the trade union had in fact been addressed by the liquidator. The Labour Court, taking into account the meetings that occurred during the consultation process and the correspondence exchanged, found that the company had met its obligation under section 10 and the decision of the WRC in this regard was set aside.
What did the High Court decide?
Debenhams then appealed, on a point of law, to the High Court in respect of the Labour Court’s decision regarding section 9. Debenhams submitted that: (i) the Labour Court was wrong to hold that the obligation to commence consultations arose on 9 April 2020; (ii) the Labour Court erred in finding that the process only commenced with the holding of the first consultation meeting on 17 April 2020; (iii) the Labour Court erred in finding that available options had been lost by that delay of eight days; and (iv) that there was no basis for awarding compensation to Ms Crowe.
The High Court examined previous case law, including case law of the CJEU, from which it concluded that there was a difficult and nuanced question as to when exactly the obligation on an employer to engage in consultations is triggered. Is it when the employer first considers a course of action which could involve the possibility of collective redundancies being made; or is it when a decision is taken, which compels the employer to consider making collective redundancies? It acknowledged this is a difficult question to answer, because boards of companies may have to consider a range of options at various times, some of which may include making some or all of the workforce redundant. However, on a full consideration of the available options, or due to a change in the trading environment, those options involving collective redundancies, may never come to fruition. Somewhat disappointingly, in this case the High Court found it was not necessary to grapple with this difficult issue.
The High Court ruled that the Labour Court was entitled to make the finding that as and from 9 April 2020, the board of directors were compelled to consider making collective redundancies. However, the High Court found that, rather than commencing with the consultation meeting of 17 April 2020, the letter sent on 14 April 2020 constituted the start of the consultation process. While the word “consultation” was not used in that letter, it was clearly stated at the start of the letter that the information was being supplied in accordance with section 10. The High Court held that the consultation process, required under the Protection of Employment Acts, is a process that can start in advance of the first consultative meeting by the provision of the information on the proposed collective redundancies as required by section 10 and that as a matter of law the consultation process began with the sending of information on 14 April 2020. Accordingly, the Labour Court erred in law in finding that the consultation process commenced with the holding of the meeting on 17 April 2020. The High Court noted that “the provision of basic information concerning the proposed redundancies is an essential part of the consultation process. It takes place in advance of the first consultative meeting so that the meeting may be productive.”
The High Court took account of the fact that the events took place during an unprecedented lockdown due to Covid-19 and during the period leading up to and after the Easter bank holiday weekend in 2020 and, significantly, it accepted that the obligation to hold consultations at “at the earliest opportunity” has to be considered within the practicalities of life on the ground at that time.
With regard to the finding by the Labour Court that the delay from 9 to 17 April 2020 meant that certain unidentified options were no longer available due to the appointment of provisional liquidators in the interim, the High Court found that this was a finding made by the Labour Court without evidence, and therefore cannot stand.
Finally, the High Court examined the Labour Court’s award of compensation. It found there was no evidence before the Labour Court that Ms Crowe had suffered additional distress due to any perceived delay on the part of Debenhams in commencing consultations. As a matter of law, she suffered no loss by the delay and the Labour Court erred in awarding compensation to her. It highlighted that the power to award compensation under the Protection of Employment Acts “is not the imposition of a penalty against the employer”.
What does this mean for employers and responsible persons?
When considering this judgment, it is important to note that amendments to the Protection of Employment Acts were made with effect from 1 July 2024 (the 2024 amendments), widening the scope of those responsible for conducting information and consultation obligations, to not just employers, but “responsible persons”. A “responsible person” includes a liquidator, provisional liquidator, receiver, or any other person appointed by the court where that person has assumed full responsibility for the management of the business. This means that “responsible persons”, just like employers, must comply with sections 9 and 10 and if they do not do so they could be guilty of an offence.
The judgment provides welcome clarity for employers and responsible persons on the inherent connection between the provision of information and the commencement of consultation, particularly in its finding that the consultation process can start in advance of the first consultative meeting by the provision of information in accordance with section 10. In addition, the High Court’s comments on the award of compensation to Ms Crowe are certainly noteworthy, in terms of the approach to be taken to an award of compensation in respect of a breach of the Protection of Employment Acts.
It nonetheless remains vital that consultation commences at the earliest opportunity. There were particular circumstances on the ground in this case involving a backdrop of the Covid-19 lockdown and Easter bank holiday weekend, circumstances which are unlikely to prevail in most scenarios. There remains no scope for delay in furnishing the relevant information and commencing consultations.
Finally, employers and responsible persons must bear in mind, not only the obligations regarding supplying information and initiating consultation with employee representatives, but also the crucial notification that must issue to the Minister for Enterprise Trade and Employment by virtue of section 12. This notification must also issue ‘at the earliest opportunity’ and in any event at least 30 days before the first dismissal takes effect. As a result of the 2024 amendments, a breach of section 12 can now also ground a complaint by an employee, for which they may be awarded up to four weeks’ remuneration, bringing the total compensation an employee may be awarded for breach of the Protection of Employment Acts to up to 12 weeks’ remuneration. A breach of section 12 by an employer or responsible person may also constitute a criminal offence.
For further information on this topic please contact Duncan Inverarity, Partner, Triona Sugrue, Knowledge Consultant, or any member of ALG’s Employment team.
Date published: 18 March 2025
A copy of the High Court’s judgment can be found here.
[1] The wording ‘or responsible person’ has since been added by the Employment (Collective Redundancies and Miscellaneous Provisions) and Companies (Amendment) Act 2024. You can read our briefing on that legislation and previous decisions in this case here.
[2] The relevant wording in Council Directive 98/59/EC on the approximation of the laws of the Member States relating to collective redundancies is “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.
