Redundant Shearings staff win £4m in legal battle after company’s collapse

More than 900 people who lost their jobs when coach holiday and hotels company Shearings went into administration last year have won a legal battle against the company after a judge ruled that it failed to properly consult staff when making redundancies.

More than 2,500 jobs were reportedly lost and 64,000 bookings cancelled when the firm’s umbrella company, Specialist Leisure Group, collapsed into administration in May 2020 after being hit by coronavirus restrictions. The Wigan-based business was later acquired by Leger Holidays and the majority of the hotels were taken on by Bespoke Hotels.

Following the company’s demise, 937 former staff pursued legal action, claiming they were not consulted correctly over the redundancy process.

One year on, a judge ruled that Shearings failed to follow the correct procedure to carry out a proper consultation with staff at risk of redundancies.

Lawyers representing the workers say the value of the claim is being calculated and is expected to be in the region of £4m. The workers will be compensated with up to 90 days’ gross pay, capped at £4,304 as the company is insolvent.

Damian Kelly, head of employment at legal firm Simpson Millar, who appeared before the employment tribunal hearing, said: “While many people assume that little can be done when a business goes into insolvency, that is not the case. Employers still have a duty under UK employment law legislation to carry out a proper consultation with staff at risk of redundancies.

“When that law is disregarded, it can lead to an extremely difficult and distressing time for those affected – many of whom are left struggling financially, while also looking to secure a new role with little, if any, notice.

“In this instance, an employment tribunal judge ruled that Shearings had failed to follow the correct process, which has left hundreds of individuals out of pocket.

“We are delighted with the outcome and to have been able to support our clients in order to access the justice that they deserve.”

The pay-out will come in the form of a Protective Awards claimed from the Redundancy Payments Service (RPS), which is part of the government Insolvency Service. The RPS is a government funded scheme set up to pay up employees up to a maximum of eight weeks’ pay where an employer has become insolvent and has been found not to have properly consulted with its employees over subsequent redundancies.

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