A former John Lewis flooring department employee who transferred to its failed concession operator The Floor Room claims they are owed tens of thousands of pounds in redundancy payments, after being told the negotiated transfer arrangements did not cover TFR’s administration.
About 30 other former employees are in the same situation.
Sharon – not their real name as this has been changed to conceal their identity and career history – says she is owed more than £40,000 in redundancy and notice payments. (The figure would have been significantly higher until John Lewis halved redundancy terms earlier this year to a payment of one week’s salary per year’s employment as it looked to reduce costs.)
Sharon says she has been told the claims are not valid as she was made redundant after TFR had entered administration, not while it was still trading. She had expected TFR to pay the monies and claim them from John Lewis.
John Lewis has promised to refund former TFR customers if they have lost money and are unable to make a Section75 claim.
‘Our thoughts are with those impacted by this recent news. While queries about redundancy sit with The Floor Room’s administrators, we have already contacted our former Partners [John Lewis refers to its employees as Partners as the company is a Partnership] to offer support. This includes exploring roles back with the Partnership, the offer of help with CV writing and employment skills, and access to our wellbeing services,’ says a John Lewis spokesman.
It is undergoing a redundancy process with more than 150 staff after reorganising its shopfloor and back office functions.
The agreement between the former staff – agreed by a staff committee – states that pay, hours, continuous service, notice period, holidays, sick pay and flexible working would not change.
A John Lewis document covering the transfer and benefits that that were outwith of the statutory TUPE arrangements states: ‘Having worked closely with TFR over the last few months, they have also agreed to replicate some of the Partners existing non-contractual benefits. Transferring partners will receive the following benefits from TFR: I matched pensions, II Partnership redundancy terms for partners made redundant immediately on transfer, III Partnership redundancy pay for a period of two years post transfer should a Partner be made redundant. This will be the equivalent to the Partnership redundancy pay at the time of redundancy.’
Sharon claims she and her colleagues understood that the terms above meant payments would happen as if they were still employed by John Lewis and so did not seek external legal opinion.
The differing opinion seems to centre on the interpretation of definition 82 of the transfer agreement: ‘Under the Concession Agreement, TFR has commercially agreed with JLP that it will honour JLP’s discretionary Partnership redundancy pay for 2 years post transfer.’
Sharon and a number of her colleagues have now sought legal advice and expect an opinion in early-mid September.
‘We were never told that if TFR went bust we wouldn’t get our money, that was never in the paperwork. To suddenly reverse on redundancy when it was never discussed in committee meetings is beyond belief. I and my colleagues trusted what the terms were. When TFR went under we were made redundant. Surely there is some way John Lewis can make payment to the staff, there must be,’ she says.
The former staff should receive statuary redundancy from the taxpayer.
PwC had not commented at the time of publication.
