Former employees of Comet have won a multimillion pound payout after an employment tribunal ruled they had not been properly consulted about their redundancies following the collapse of the electrical retailer, in an administration handled by Deloitte.
The judgment at the tribunal in Leeds was that Comet ‘failed to comply with its obligations to consult trade unions and representatives of employees affected by proposed redundancies’ when the company went into administration in 2012.
The tribunal heard that some 7,000 workers had not been collectively consulted about losing their jobs. More than 2,000 employees filed a claim against Comet and Deloitte, and are now in line for a maximum of 90 days’ pay worth £450 a week.
Among those giving evidence to the tribunal was Michael Walters, Comet’s former head of finance. The judgment includes a statement from the lawyer representing the largest group of claimants which said: 'As Mr Walters' evidence makes clear, this was simply an old-fashioned corporate raid that resulted in a number of private equity investors choosing to liquidate a 75-year-old British company, at a cost of almost 6,900 jobs in order to realise a quick and substantial profit.’
The judgment also stated: ‘The liquidation of Comet may properly be described as one of the more regrettable episodes of British corporate history.’
It notes, however, that lawyers acting for the company and the administrators ‘rebutted that contention stoutly’.
The joint liquidators, Neville Kahn and Chris Farrington of Deloitte, said in a statement: ‘It is disappointing that the tribunal has found against the company. The Comet management team, administrators from Deloitte and our advisers worked tremendously hard under very challenging circumstances to provide the best possible consultation to the employees.
‘Comet Group Ltd made significant efforts to consult with its nearly 7,000 employees across more than 250 sites during the administration, while a purchaser for the business was sought. Regrettably, it proved impossible to find a purchaser willing to save the business and all the employees ultimately had to be made redundant.’