ore than 400 former Debenhams staff are set to receive a payout totalling around £860,000 after winning a legal battle against the retailer, which went bust more than two and a half years ago.
A tribunal judge ruled that the business failed in its duty to properly consult with the staff at risk of redundancy, lawyers acting on behalf of former employees said.
Debenhams fell into administration in 2020 and was forced to shut its doors after 242 years on British high streets.
It marked one of the UK’s biggest retail failures and resulted in more than 10,000 job losses. The business suffered from national lockdowns during the Covid pandemic.
In this case the employment tribunal judge has ruled that the retailer failed in its duty under UK employment law legislation to carry out proper consultation with staff at risk of redundancies
Law firm Simpson Millar, which represented the group of former workers, said the settlement relates to claims for staff who were based in the historic department store on London’s Oxford Street.
It means the 419 staff can be compensated by up to 90 days’ gross pay, capped at £4,304 given the retailer is insolvent.
The money will come from a Government-funded redundancy scheme designed to compensate people when their employer has gone bust.
Amanda McKinley, a lawyer at Simpson Millar, said: “In this case the employment tribunal judge has ruled that the retailer failed in its duty under UK employment law legislation to carry out proper consultation with staff at risk of redundancies, and the outcome of the legal action now paves the way to secure a payout in the form of a protective award for our clients which is expected to be in the region of £860,000.”
She said the law firm is “delighted” to have received the first judgement on behalf of hundreds of former staff.
It is also representing a further 475 people who have raised a claim against Debenhams and are awaiting final judgements.
Ms McKinley added: “The National Insurance Fund which employees pay into is a lifebelt for many people who find themselves in such circumstances, and in this instance our clients are delighted that the matter is now coming to a close so that they can finally move forward with their lives.”
The decision comes amid a turbulent time for retailer Wilko, which fell into administration earlier this month, putting more than 12,000 jobs at risk.
The high street chain is in the midst of seeking bids for the business that could rescue some or all of its stores.