Halliwells, the aftermath: HBJ and failed firm face court

21 February 2011 | By Luke McLeod-Roberts

Failed firm Halliwells and HBJ Gateley Wareing are facing court action relating to the Manchester firm’s demise, with claims alleging sex discrimination, unfair dismissal and breaches of Transfer of Undertakings (Protection of Employment) Regulations (Tupe) being launched.

As TheLawyer.com revealed last week (15 February), a letter from the firm’s joint administrators, BDO partners Dermot Power and Shay Bannon, estimated that Halliwells owed around £191m to unsecured creditors on what was a £67m turnover in 2009-10, the firm’s final full year of trading.

As a result it is thought unlikely that claimants will recover funds from the failed business itself, which is why HBJ is being targeted. HBJ was one of four firms that agreed to buy the majority of Halliwells’ assets for a total of £7.4m after it went into administration on 20 July 2010.

One former Halliwells property lawyer has launched an action against HBJ, seeking £66,451.76 in relation to being made redundant by the firm while she was in the middle of a three-day labour.

In a separate case, a senior member of Halliwells’ business support staff is bringing a claim against the firm’s administrators and HBJ, alleging failure to consult and unfair dismissal.
In a third case, a group action has been brought against Halliwells. The case, which has been filed at Manchester Employment Tribunal, includes Halliwells’ former HR director Charles Crookall as a claimant.

In the first case, the claimant has brought the action because she believes she was made redundant as part of a process designed to get Halliwells into shape to be sold off. The part of the business she worked in was bought by HBJ after she had been laid off.

The lawyer alleges that, because she was in hospital giving birth while the redundancy programme was being carried out, she was not consulted properly, so the firm did not comply with legal requirements.

Her claim states: “The redundancy consultation process ended on 26 May, which was within two weeks of me giving birth (potentially a breach of compulsory maternity leave provisions). This protection afforded to new mothers is deemed so important that a breach of this provision is a criminal offence.”

She adds: “I believe that the redundancies associated with the real estate practice in London constituted ­dismissals arising as a result of a proposed transfer of the business and its activities, which was not economic, technical or organisational. The redundancies in the real estate department in ­London were designed to facilitate the transfer of the employer’s business and activities to a third party.”

The group action focuses on the alleged failure of ­Halliwells’ administrators to inform and consult ­adequately with support staff as part of the redundancy process.

Crookall did not respond to calls for comment, but another claimant explained that 38 members of support staff were made redundant after partner Rod Waldie notified them on 20 July 2010, the day the firm went into administration, that they should attend a ­meeting with BDO’s Power at 5pm that day.

They were informed at the meeting that they were to lose their jobs that day without a redundancy ­consultation.

Ellie Hibbert, an employment lawyer at Winckworth Sherwood, told The Lawyer that in a collective ­redundancy situation the insolvency practitioner is required to consult “in the usual way - 30 days for 20 or more employees and 90 days for 100 or more employees.”

She added: “Although the legislation does allow for a ’special circumstances’ defence to excuse a failure to comply with the consultation obligations, it is well-­established that insolvency is not, in itself, a special ­circumstance.”

The claimants in the group action believe that no thought was given to their fate when the firm went into administration.

“No partners from ­Halliwells came up to the meeting,” said one claimant. “That was what annoyed a lot of people. [Former ­managing partner] Ian Austin had left the Friday before. I do think it was a bit poor on their part.”

A source close to the ­situation told The Lawyer: “The whole issue about what to do with ­support staff [at Halliwells] was left completely untouched. Partners were very good about ­looking after themselves.”

HBJ declined to ­comment. Bannon and Power were unavailable for comment.