THE HIGH COURT has allowed Debenhams to appeal against a Labour Court ruling last April that granted workers four weeks’ compensation.

On 9 April 2020, Debenhams told staff that the company was going into liquidation and that it would not be reopening its Irish outlets.

The following month, former Debenhams workers started a picket outside stores in Ireland to seek a fair redundancy package.

This picket lasted for over a year and focused on preventing stock and company assets being removed from closed stores while raising attention to the workers’ calls for four weeks’ of redundancy settlement per year of service.

The picket came to an end after the Government created a €3 million training, upskilling and business start-up fund.

Last April, the Labour Court ruled that in a test case brought on by former Debenhams shop assistant Jane Crowe that the “appropriate compensation is four weeks’ pay”.

She had been employed as a shop assistant with Debenhams since October 1996 and was at the forefront of the pickets.

However, the High Court today allowed Debenhams Ireland to appeal against this decision.

‘Insolvent’

Debenhams Retail Ireland was a wholly owned subsidiary of an English group of retail shops.

It had been in examinership in 2016 and traded at a loss between 2017 and 2019, and Debenhams Retail Ireland was only able to continue trading due to “extensive financial support” from its parent company.

However, at around 9.30pm on 8 April 2020, the board of directors of Debenhams Ireland were informed that the UK parent company would no longer provide further funding and therefore Debenhams Ireland was “hopelessly insolvent”.

The following day, 9 April 2020, the board of directors of Debenhams Ireland informed staff that the company was going into liquidation and would not be reopening its Irish outlets.

However, a meeting between management and the union to discuss collective redundancies did not take place until 17 April, 2020.

Debenhams Ireland said at the time that a meeting wouldn’t take place until the appointment of liquidators.

It had been directed by the UK parent company on 14 April 2020 to appoint a liquidator and this happened on 16 April, 2020 – the first meeting with union reps took place a day later, on 17 April.

In a ruling last year on 10 April, 2024, the Labour Court deemed that while Debenhams Ireland did engage in consultation for thirty days prior to the notice of redundancy issuing, they “failed to hold meaningful consultations in good time”.

“In waiting until the liquidator was appointed the available options had narrowed significantly,” said the Labour Court in its ruling.

The Labour Court found that this was a breach of Section 9 of the Protection of Employment Act, which requires that consultation is commenced “at the earliest opportunity”.

The Labour Court decided that the appropriate compensation is four weeks’ pay.

This award was by way of a test case and there are some 792 other cases concerning employees in a similar position to that of the individual test case.

‘Practicalities of life on the ground’

In today’s judgement, the High Court noted that the obligation to hold consultations “at the earliest opportunity” had to be “considered within the practicalities of life on the ground at that time”.

Debenhams Ireland had asked the High Court to take into consideration that fact that these events “took place during a period of unprecedented lockdown due to Covid”.

It also asked the Court to consider that these “critical events took place in the period leading up to and after the Easter Bank Holiday weekend in 2020”.

For example, April 9 2020, when staff were informed that the company was going into liquidation was Holy Thursday.

April 10 2020 was Good Friday and the following three days were the Easter Bank Holiday weekend.

On the first day after the Easter Bank Holiday weekend, 14 April 2020, Debenhams Ireland was informed by its parent UK company that it would have to appoint a liquidator and this happened on 16 April 2020.

The first meeting between the board of directors and union reps then took place a day after a liquidator was appointed, on 17 April 2020.

The High Court stated that there was “no loss suffered in the delay” by Debenhams Ireland to commence the consultation process and that the “Labour Court erred as a matter of law in awarding compensation to the respondent”.

In light of this, Debenhams Retail Ireland will be allowed to appeal against last year’s decision by the Labour Court to offer four weeks’ compensation.

The High Court judgment was delivered electronically today and both parties have two weeks to provide brief written submissions on the terms of the final order and on costs and on any other matters that may arise. 

The matter will be listed for mention on 26 March for the  purpose of making final orders.