THE JTF Mega Discount Warehouse chain, which had a branch on Chesford Grange in Warrington, has collapsed with the loss of 500 jobs, with staff taking legal action over the redundancy process.
Workers claim the 40-year-old retail chain failed to carry out proper redundancy consultations after receiving notice that they had been made redundant with immediate effect after a deal for the sale of the business fell through.
News that the Nottinghamshire-based, retail chain had collapsed, resulting in the loss of around 500 jobs, broke yesterday, Wednesday, July 21st.
A statement issued on behalf of the company said that the pandemic had played a significant role in its demise, with the forced closure of stores wiping out fireworks and Christmas sales which were ‘two of the largest seasonal items for JTF’.
According to news reports the company is continuing to seek a buyer, but it has issued a notice of intention to appoint an administrator.
Now, a handful of former members of staff have contacted law firm Simpson Millar after they say they were notified by email that they had been made redundant with immediate effect, and that those on furlough would not be returning to work as expected.
National law firm Simpson Millar says it is now in the early stages of investigations to enable appropriate legal action to be brought to secure what is known as a Protective Award on their behalf for the company’s failure to properly consult staff regarding the mass redundancies.
The firm has also set up an online compensation form that allows other employees to see whether they can also claim.
Damian Kelly, head of employment law at the firm, said: “The current situation is making it difficult for many companies across most industries and it is no surprise that retail giants – and particularly those that are so reliant on physical footfall – are being significantly impacted by the coronavirus pandemic.
“Sadly in this instance, we understand that there had been a buyer for the business, but that the sale will no longer be taking place. As a result, the number of employees who are facing redundancy is really quite significant.”
Damian went on to say that while many people would assume that JTF would not have to follow the correct employment procedures because it had gone into administration, they still do have a duty of care to their staff under current employment law legislation.
He said: “While some companies are struggling because of the pandemic, they still have a duty under current employment law legislation to carry out a proper consultation with staff at risk of redundancies. Where that does not happen, employees can bring a claim for a Protective Award.”
Damian explains that a Protective Award is a payment awarded by an Employment Tribunal in cases where an employer fails to follow the correct procedure when making 20 or more redundancies and, where an Employment Tribunal finds in the favour of the employees, they will be able to access the funds via the Government Insolvency Service.
Simpson Millar’s leading employment law team is currently instructed by thousands of former employees affected by the collapse of a number of well-known businesses including Debenhams, Thomas Cook, Arcadia, Mothercare, Bathstore and Jamie’s Italian.
Damian, who has decades of experience representing people who have been made redundant without the correct consultation, added: “When people are made redundant the first thing they normally do is look for another job, but in the current climate new jobs are very rare and competition for each role is significant.
“As a result, people are having to prioritise taking measures like applying for universal credit and mortgage holidays in order to be able to survive financially.
“While the process to claim for a Protective Award will not result in an influx of cash immediately, legal protection remains in place to support people who are made redundant without being taken through the correct consultation process, and the money recovered in successful claims will provide some longer-term security for those affected.”
JTF chairman Arthur Harris, who bought the chain in January last year, says the redundancies were “the only real course of action”.
He said: “We believed we had secured a sale of the business but unfortunately the buyer pulled out at the last minute leaving nowhere to go.
“JTF had a fabulous team. I believed I had done everything possible to turn it around, taking it into profit within four months, but just hadn’t factored Covid into the scenario. Lockdown two and three wiped out fireworks and Christmas sales, two of the largest seasonal times for JTF.”
A JTF spokesman said it continued to seek a buyer.
Staff were furloughed as shops shut and told along with customers and local press the closures were temporary.
The Warrington store facebook page still states the store is temporarily closed pending a grand relaunch.
Customer reviews in the run-up to Christmas last year complained that the premises were poorly stocked and half empty and looked ready for closing down.