Kawsar Zaman successful against Carillion, the largest trading liquidation in UK history

Mon, 25 Jan 2021

Kawsar Zaman has successfully represented, as leading junior, a group of 74 claimants against Carillion in a 10-day preliminary hearing at the Manchester Employment Tribunal.

The compulsory liquidation of Carillion plc, a publicly traded company listed on the FTSE 100 with a turnover of £5.2bn in 2016, and certain of its subsidiary companies on 15 January 2018, is described by the Insolvency Service as the largest and most complex trading liquidation in the UK.

The Claimants brought claims for protective awards under section 189 Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”) in respect of failures to comply with the requirements of section 188 TULRCA to consult with representatives about proposals to dismiss as redundant 20 or more employees at an establishment within a period of 90 days or less.

It was common ground that Carillion did not comply with the requirements of section 188 TULRCA. Carillion had argued that there were special circumstances which rendered it not reasonably practicable to comply with the requirements of section 188. Carillion relied on the circumstances surrounding the compulsory liquidation of Carillion plc and the relevant subsidiary companies as constituting the special circumstances. The Claimants argued that there was nothing “sudden and unexpected” about Carillion’s insolvency and liquidation on 15 January 2018; rather, it was the culmination of a steady deterioration in the Group’s financial situation from 10 July 2017 when Carillion announced to the market that its first half operating profit was lower than expected.

In a unanimous judgment, spanning 95-pages, the Tribunal determined that:

  1. The duty to consult under section 188 of TULRCA arose on 14 January 2018; and  
  2. Carillion failed to establish that there were special circumstances making it not reasonably practicable to comply with a relevant requirement of section 188 TULRCA as at 14 January 2018.

Kawsar Zaman was instructed by Senior Solicitor Laura Pearce of JFH Law.

Unite the Union employees were represented by Thompsons Solicitors LLP, OH Parsons LLP and Weightmans LLP who collectively instructed Melanie Tether and Rosalie Snocken of Old Square Chambers.

Carillion were represented by Sandra M Wallace of DLA Piper LLP who instructed David Reade QC and Daniel Northall of Littleton Chambers.

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