Established in 1983 in Wrexham, North Wales, the business won a significant contract with a major supermarket chain in 2017. However, a report by administrators PricewaterhouseCoopers found mounting debts and poor trading had contributed to its collapse in October 2019; leaving more than 300 workers out of work.
Following the company’s demise, a total of 108 former staff instructed employment law experts at Simpson Millar to pursue legal action on their behalf amid claims that they were not consulted correctly over the redundancy process.
Almost two years on, the workers have won their legal battle against the business after a judge ruled that Tomlinson’s Dairies had failed to follow the correct procedure to carry out a proper consultation with staff at risk of redundancies.
Lawyers representing the workers say the value of the claim is now being calculated and is expected to be in the region of £400,000.
Damian Kelly, head of employment at Simpson Millar appeared before the employment tribunal hearing in the case to secure the judgment on behalf of Tomlinson’s Dairies's workers.
“The collapse of Tomlinson’s Dairies was particularly difficult for its employees, many of whom had worked there for many years," Kelly said. “While it’s often assumed if a business goes into administration staff just have to accept their fate, in reality employers do still have a duty under current employment law legislation to carry out a proper consultation with anyone at risk of redundancies.
More than 100 out of pocket
“When that law is disregarded, it can lead to an extremely difficult and distressing time for those affected – many of whom are left struggling financially, whilst also looking to secure a new role with little, if any, notice. In this instance, an employment tribunal judge ruled that Tomlinson’s Dairies had failed to follow the correct process, which left more than 100 individuals out of pocket.”
The judgment paves the way for a pay-out in the form of Protective Awards which have been claimed from the Redundancy Payments Service (RPS), which is part of the Government Insolvency Service.
The RPS is a Government-funded scheme set up to pay up employees up to a maximum of eight weeks’ pay where an employer has become insolvent and has been found not to have properly consulted with its employees over subsequent redundancies.
The RPS pays other funds owed to employees, including redundancy pay, arrears of holiday pay and notice pay. However, while these claims can be made by an employee completing an online form, a claim for a Protective Award requires a formal Employment Tribunal Order.
Up to 90 days' gross pay
“As a result of the employment tribunal judgments our clients will now be compensated by up to 90 days’ gross pay, albeit capped at £4,304 given that the company is insolvent," Kelly confirmed.
“The National Insurance Fund which employees pay into is a lifebelt for many people who find themselves in such circumstances, and in this instance our clients are delighted the matter is now coming to a close so they can finally move forward with their lives.”
Damian Kelly added: “The process to claim for a Protective Award does not result in an influx of cash immediately as a claim has to be brought to an Employment Tribunal, which can take time."