Former KWM staff offered financial settlement over handling of redundancies

 

 

 

 

 

 

 

 

About 200 former King & Wood Mallesons (KWM) staff have been offered a financial settlement by the firm’s administrators, over the way their redundancies were handled when the firm’s European arm collapsed in January.

The group, which brought the employment tribunal claim in February, has received a settlement proposal of eight weeks’ pay for each claimant, after administrators Quantuma admitted a ”technical breach” in the required duration of a redundancy consultation when it was carried out by KWM.

All payouts will be capped at £479 per week per person, equating to a maximum individual payment of £3,832 from the Redundancy Payment Office. Any unpaid wages already paid will be deducted from this total.

Based on 200 former staff and lawyers receiving £3,832, the total payout from the Redundancy Payment Office would total £766,400, less any unpaid wages already drawn.

The settlement proposal was made to Herrington Carmichael, the solicitors acting for the former staff, last Friday (4 August) and members of the class action have until 5pm this Friday (11 August) to accept the proposal.

Before making more than 100 redundancies at one time, UK employers are obliged to enter into a formal consultation process of 45 days before the first dismissal.

An email to staff in the group from Herrington Carmichael stated: “They [Quantuma] argued that in the months prior, redundancies were not anticipated and a full business sale was expected, allowing all employees to transfer to the buyer. This obviously then didn’t happen but it is claimed that due to the timeframes allowed by the fluid situation, it was impossible for them to comply with their obligations.”

Herrington Carmichael has advised the claimants that the settlement on offer is ”the maximum recoverable value available”, and has recommended that they accept it, thus avoiding the need for a full employment tribunal hearing.

The email to claimants explains: “Although the Employment Tribunal can award up to 90 days’ pay, at full rate, the Redundancy Payment Office will only allow recovery of eight weeks’ pay capped at £479 per week.”

Quantuma’s Andrew Hosking and Sean Bucknall, the administrators of KWM, told Legal Week: “Whilst the firm had commenced and undertaken a consultation process, the consultation had concluded early due to the onset of the firm entering administration. As a result, there was a technical breach in respect of the required duration for the consultation process.”

Leigh Day employment partner Michael Newman commented: ”Protective award claims are some of the more straightforward tribunal claims. Most of the issues in these cases involve arguments about the size of the award (if a company has performed part of a consultation), or if the company thinks it has a complete defence by having a good enough reason not to have performed a consultation. Insolvency or company collapse tend not to be good enough reasons.”

Hosking and Bucknall are leading the administration process with advice from CMS and Ashfords. Herrington Carmichael employment head Alistair McArthur is advising the claimant group.

Last week, about 20 former KWM staff members received distributions from a hardship fund that has raised more than £100,000 so far. The fund was launched earlier this year by former EUME managing partner Tim Bednall and London partners David Wilman and Darren Roiser.

It was created to support staff who were on or due to start maternity leave at the time of the firm’s collapse, those who have been unable to find new jobs, and those caring for ill dependents or suffering from illness themselves.

Herrington Carmichael declined to comment.