The receivers of Dairy Farmers of Britain (DFB) have revealed that they will not try to block a protective award, which could result in thousands of pounds of compensation being paid to over 2,000 former DFB employees.
A protective award is compensation that can be ordered by an employment tribunal if it is felt that individuals were made redundant without an appropriate consultation period. Acting on behalf of former employees, the Union of Shop, Distributive and Allied Workers is now able to lodge the protective award at a tribunal. This would not have been possible without the receiver's consent.
Stephen Oldfield, joint receiver of DFB and a PwC partner said he would not block the request, as "we are confident we did all we could to consult with staff given the very difficult circumstances presented by the insolvency"
Owen Warnock, partner at law firm Eversheds, however, said there was a good chance of the union getting compensation for workers, as "only under extremely exceptional circumstances, such as a fire destroying a building or factory, is a firm exempt from conducting a full consultation period with employees. Financial circumstances are very rarely regarded as a good enough reason."
If the union is successful, it could mean that DFB's former employees are entitled to up to 90 days' pay, as well as unpaid holiday and other claims, such as enhanced redundancy pay.
The amount paid out is based on a series of government calculations, which are about factors such as length of employment, so each employee is entitled to varying amounts.