The Primark Situation - Workplace Closures due to Circumstances Beyond the Control of the Employer

Posted in : Seamus Says - Employment Law Discussion on 7 September 2018
Seamus McGranaghan
O'Reilly Stewart Solicitors
Issues covered:

What are the rights of employees in situations like the current situation of the Primark staff, where the organisation is no longer trading due to a major incident that was outside of their control?

Seamus: Yeah. This is a bit of a tragic story, as we all know, and it's complicated by the fact that approximations through media and stuff like that, I think that we're looking at around 400 employees in total, that are employed just within that one building in Primark. So, obviously, a situation where the building is no longer there, and the business isn't trading, but we have employees who have rights, and we have an employer that has obligations here as well. So it is certainly a minefield for both parties. I'm sure it creates a lot of anxiety for the employees in terms of what's going to happen to them, and they're worried about, you know, where's the money going to come from in terms of their bills. Are they going to be paid? How long, really, can Primark sustain a situation like that?

And we know that there have been things going on in the background in terms of Primark looking for alternative options, and things like that, which we'll maybe touch on a bit later on. But initially, the bottom line is that the employees really need to probably go back and look at their contract and find out what their contract is saying. Often within contracts and I'll have to say not all contracts will have this, but a lot of contracts will have a right for the employer to lay off for short time working. And if there is a clause within the contract, it does facilitate the employer to provide a period of layoff.

So, Primark, I think, are doing the right and the decent thing so far as we know. The fire was two weeks ago, they announced that they were going to retain the salaries of the employees for that week, and now we're into the second week, and we understand that they're covering that (the salaries) too.

But one does wonder what is the longevity to all of this. They have a business that isn't making any money, and they are a big operation. You know, they're a big multinational organisation. They have plenty of resources when it comes to that, but, at the same time, you wonder where the line is potentially going to be drawn.

What the employee really has to do is go back and look at the contract of employment. If there isn't the layoff facility or a period within the contract, the employee is entitled to their contractual hours, and the employee could take comfort in the fact that there is the ability for or the right for them to receive those hours, but the risk would be then that the employer would be looking at some sort of redundancy on the basis that the business is no longer there.

So, certainly, it's an anxious time for any employee, but, hopefully, both sides are working I know the trade unions are involved and things like that. So we have a situation, essentially, where if there's a right to layoff, that the employer here could do that. The basics of in and around how that works is that the employer has a right to lay off for four weeks. And after those four weeks, the employee can request a redundancy, or, alternatively, the other situation is where there has been a layoff for 6 weeks in a period of 13 weeks, you know, sort of, looking at an average of it. So those are two aspects.

Scott: Well, this one here, the employees won't be brought back in.

Seamus: No.

Scott: And then put out and brought back in. And put out like you would get in inclement weather or something like that. And of course, it's a situation where the problem is outside the control of the employer like this fire, so there has to be a big trauma. It can be that the employer decides, "You know what? I don't need that many workers this month I'm going to lay them off and then bring them back in," because they control that. And this one here, there's been a big trauma basically, there's been a big fire, and there's nothing the employer can do about it. So if they've got the right to lay off, they pay them a guaranteed payment. It's less than 30 quid.

Seamus: Yes. And the guaranteed payment is for five days.

Scott: So they get five days so £150, say, that they would get. And after that, there are no payments. You would have to sign on to get some kind of benefits if you're an employee.

Seamus: That would be the option for the employee. So it's not a great situation for the employee at all, and it's a risk for the employer that if their hand is forced with a redundancy, that they're losing their skilled staff and potentially very good members of staff.

Scott: Yeah. And if an employee wants a redundancy, they end up having to resign, so they'll lose their notice pay as well.

Seamus: That's the risk. Really, it's a no-win situation, it appears, from all sides.

Scott: And could they be forcibly redeployed? So Primark is looking at other premises, hopefully somewhere in the city centre. So, you know, it's not going to be a redundancy situation if they can find you a job somewhere in the High Street or around City Hall, for example. But if it's the other side of the town, that could cause some problems. But there is probably no flexibility clause in the contract. I don't know. There may be. But assuming there isn't, you know, could they be forced to be redeployed?

Seamus: Well, the aspect of it, from what we know, is that there has been media reports that there are available buildings within the city centre that Primark are looking at, and possibly taking an available building. I mean, with all the will in the world it's going to take time for that to happen. I mean, you would imagine that there would have to be a lease arrangement put in place for a building. There would have to be a fit-out probably, you know, the statutory bodies in terms of building control and possibly planning permissions and things like that. So it's hard to see an immediate redeployment situation. And I suppose that if there are other Primark stores out there at the minute, there could be some redeployment in terms of some of the employees. But we are talking about a total of 400, and it's hard to imagine that there would be the ability to absorb that, you know, in other places. But, you know, when it comes down to redeployment, I suppose the issue is always that, you know, there's past case law there that tells us that you can't forcibly redeploy the employee, that there could be issues in terms of if the employee has transport. What are the hours going to be? Have they flexibility arrangements already in place? And, you know, will it ultimately suit the employee? And as you say, the employee would have to resign in their position and look to try and claim some sort of constructive dismissal at that point, if it was being forced on them.

And, I mean, I would imagine that there would be a lot of goodwill with the employees and the employer, but it just might get down to the point where someone and, particularly, like, you know, if you're someone that's relying on public transport, and it's just not feasible for them to get to the new redeployed store, I would have thought if it's located within the city centre, that, you know, Belfast hasn't got a massive city centre it is within walking distance, you would have thought that's feasible. But maybe outside of that, it could create problems. Certainly, if it was in another city, a larger city than Belfast, you could certainly, you know, see that might not suit, and it might be impossible for an employee to really be redeployed.


This article is correct at 07/09/2018

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Seamus McGranaghan
O'Reilly Stewart Solicitors

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