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Tribunal threat to Sports Direct over 'dodgy' USC redundancies Sports Direct: tribunal threat over 'dodgy' USC redundancies
(about 7 hours later)
Sports Direct ignored repeated attempts by administrators to consult with staff who lost their jobs in the “dodgy” collapse of its fashion brand USC, and could potentially face employment tribunals for not giving workers enough notice.Sports Direct ignored repeated attempts by administrators to consult with staff who lost their jobs in the “dodgy” collapse of its fashion brand USC, and could potentially face employment tribunals for not giving workers enough notice.
The claim was made by the administrator Philip Duffy, who was appointed by USC to complete a pre-pack administration that saw USC go bust only to be bought back by Sports Direct debt-free.The claim was made by the administrator Philip Duffy, who was appointed by USC to complete a pre-pack administration that saw USC go bust only to be bought back by Sports Direct debt-free.
He told MPs at the Scottish Affairs Committee: “On 6 January, they [USC] issued … a notice of intention to appoint administrators. So the company is not in administration, but they are putting down a notice… You could argue that at that point consultations should have started.”He told MPs at the Scottish Affairs Committee: “On 6 January, they [USC] issued … a notice of intention to appoint administrators. So the company is not in administration, but they are putting down a notice… You could argue that at that point consultations should have started.”
USC went bust on 13 January and staff were given 15 minutes’ “consultation” between being told there was a risk of losing their jobs and actually being made redundant. USC was put into administration by Sports Direct and was bought back immediately also by Sports Direct, with its £15.3m debts to staff, suppliers and landlords wiped clear USC went bust on 13 January and staff were given 15 minutes’ “consultation” between being told there was a risk of losing their jobs and actually being made redundant.
Asked why administrators only gave 15 minutes’ notice, Mr Duffy said: “Nobody had given them notice beforehand, so we had to do something.”Asked why administrators only gave 15 minutes’ notice, Mr Duffy said: “Nobody had given them notice beforehand, so we had to do something.”
He added: “On the ninth [of January] we offered draft letters to go in consultation … We emailed it to them.” However, he added that the letter was never used.He added: “On the ninth [of January] we offered draft letters to go in consultation … We emailed it to them.” However, he added that the letter was never used.
“The law states that you have to consult, no matter how long that consultation is. The fact that we gave 15 minutes’ notice was on advice from our lawyers.“The law states that you have to consult, no matter how long that consultation is. The fact that we gave 15 minutes’ notice was on advice from our lawyers.
“In my mind, it is complying with the law, but not really with the spirit… but we have to do that to mitigate claims against the company.” Sports Direct ignored repeated attempts by administrators to consult with staff who lost their jobs in the “dodgy” collapse of its fashion brand USC “In my mind, it is complying with the law, but not really with the spirit… but we have to do that to mitigate claims against the company.”
Mr Duffy first met representatives of Sports Direct, Justin Barnes and Ben Gardener, in November last year and a second meeting on 17 December was set up after Diesel, a supplier to USC, issued a winding-up order over an unpaid bill.Mr Duffy first met representatives of Sports Direct, Justin Barnes and Ben Gardener, in November last year and a second meeting on 17 December was set up after Diesel, a supplier to USC, issued a winding-up order over an unpaid bill.
He suggested that from that date it was a “grey area, and it gets greyer as time goes on,” over whether a consultation with staff should have begun.He suggested that from that date it was a “grey area, and it gets greyer as time goes on,” over whether a consultation with staff should have begun.
Committee member, Jim McGovern, asked: “A lack of consultation would presumably allow former employees to go to an employment tribunal and claim some sort of compensation for that lack of consultation?”Committee member, Jim McGovern, asked: “A lack of consultation would presumably allow former employees to go to an employment tribunal and claim some sort of compensation for that lack of consultation?”
Mr Duffy replied: “I presume so, yes. It has happened in past administrations and insolvencies; employees have gone to tribunal and won cases.”Mr Duffy replied: “I presume so, yes. It has happened in past administrations and insolvencies; employees have gone to tribunal and won cases.”
The comments were made after Sports Direct’s chairman Keith Hellawell gave evidence for three hours over the administration, admitting “searching questions” would be asked of his board.The comments were made after Sports Direct’s chairman Keith Hellawell gave evidence for three hours over the administration, admitting “searching questions” would be asked of his board.
But Mr Duffy contradicted the timeline of the administration, which left the taxpayer nearly £700,000 out of pocket, suggesting Mr Hellawell had “misunderstood” aspects.But Mr Duffy contradicted the timeline of the administration, which left the taxpayer nearly £700,000 out of pocket, suggesting Mr Hellawell had “misunderstood” aspects.
The committee was incredulous at the process. The MP, Simon Reevell, said: “At one level, to use a technical phrase, this all looks well dodgy. It looks as if a group of executives kept the remainder of the board in the dark to make arrangements to put a company into administration, and they sprung it on the board at the last minute so that the board had to agree.
“The process went through and the only people who could buy it were a company run by the same people who had known all along that administration was a possibility. And, at the end of it, all that seems to have changed is that they are no longer responsible for quite a large amount of debt.”“The process went through and the only people who could buy it were a company run by the same people who had known all along that administration was a possibility. And, at the end of it, all that seems to have changed is that they are no longer responsible for quite a large amount of debt.”