“This is my time! I am quitting to pursue my dream of not having to work here.”
The managing director of Nippybus, a bus operator based in Somerset, has closed down the company without warning, informing all employees to “consider themselves dismissed/redundant”. The note left by Sydney Hardy titled “The end” has caused a stir in the national media due to its blunt nature, but also provides a prime example of how not to handle the closure of a business.
In the internal memo posted on the company’s website, Mr Hardy stated “I have had enough and realise I cannot work with you, the people I employ, a moment longer… The gates are now closed and will not open so you can stay in your scratchers and have a lie in.”
True to his word, Mr Hardy did not open Nippybus for business the following day and staff arrived at work to find the gates closed. Ceasing to carry on a business is a redundancy situation requiring an employer to engage in collective consultation where 20 or more employees are being made redundant. Failure to collectively consult can leave employers exposed to claims for a “protective award” of up to 90 days’ pay per employee.
One of the employees who was quoted in the press, Dave English, had worked for Nippybus for almost nine years. Not only does this mean that Mr English would have the requisite two-year qualifying period of employment for an unfair dismissal claim, but his eight years of service would be significant in calculating the basic unfair dismissal award.
Although redundancy is a potentially fair reason for dismissal, Nippybus’ apparent failure to engage in any consultation (either collectively with employee representatives, or with individual employees) may well render these dismissals unfair. In addition to the basic award, an employment tribunal can award an unfairly dismissed employee compensation for financial loss up to the lower of £80,541 or a year’s pay.
It is not clear whether staff have been paid by Nippybus. Some were apparently handed payslips by a security guard through the fence when they arrived at the closed premises, but said that no money had gone into their bank accounts. The non-payment would constitute a breach of contract by Nippybus, as would the failure to make any redundancy payments employees are entitled to under their contract. If employees are only due statutory redundancy payments and this is not paid, they can also bring a claim for that payment.
Failure to provide employees with the required notice of termination of employment is a further breach of contract and can lead to a claim for wrongful dismissal. It is not clear what the notice requirements, if any, under the employees’ contracts were, but Nippybus should have complied with those notice requirements, or the relevant statutory minimum notice periods if the employees’ contracts were silent on the issue.
The challenge for employees will be pursuing claims and recovering the outstanding sums if Nippybus is insolvent. If Nippybus goes Nippy-bust, the employees will be able to recover some, but by no means all, of the sums due to them from the National Insurance Fund.
Shannon Diggory is an employment associate at Reed Smith