About this case:

• Citation:
  [2025] IEHC 141
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Anthony Barr

Delivering judgment for the High Court, Mr Justice Anthony Barr opined that although the notification by Debenhams’ parent company that the funding upon which it relied would no longer be extended to it “was devastating for all concerned with the appellant company, and in particular, for its employees; unfortunately there was nothing that the Board of Directors could have done to help them”.

Background

From 2016, the appellant company, Debenhams, was in examinership and traded at a loss between 2017–2019, only being able to continue trading with extensive financial support from its parent company.

At 9:35pm on 8 April 2020, the appellant’s board of directors were informed that the parent company would not provide any further funding, leaving the appellant hopelessly insolvent.

The following day, the board met and resolved to advise the parent to instruct Debenhams’ directors to seek the appointment of provisional liquidators. On 14 April 2020, the administrators of the parent so instructed the directors and by email of the same date, the directors provided the respondent’s trade union representative with information about the proposed redundancies.

A consultative meeting took place between the provisional liquidators, the board and the respondent’s trade union representatives on 17 April 2020.

Debenhams brought an appeal on a point of law before the High Court following findings by the Labour Court in favour of the respondent store assistant that the obligation to commence consultations with employees’ representatives at the earliest opportunity under s.9 of the Protection of Employment Act, 1977 (as it then was) arose on 9 April 2020; that the holding of the first consultation meeting occurred on 17 April 2020; and that available options to ameliorate the effect of the collective redundancies had been lost by that delay of eight days.

The Labour Court also awarded the respondent four weeks’ pay as compensation, whose case was a “test case” out of nearly 800 other similar cases.

The High Court

Mr Justice Barr had regard to Akavan Erityisalojen Keskusliitto AEK v Fujitsu Siemens Computers OY (Case C– 44/08), Tangney v Dell Products Ltd [2013] IEHC 622 and JLOG v Resorts Majorca Hotels International SL (Case C–589/22), noting that there is “a difficult and nuanced question” as to when the obligation to engage in consultations is triggered.

The judge considered that the question was even more important in light of the amendments to the 1977 Act in 2024 which made a ‘responsible person’ who fails to inter alia initiate the consultative process under s.9 guilty of an offence.

However, the court found it unnecessary to grapple with that issue in circumstances where the Labour Court’s finding could not be set aside as having been made without evidence or as being irrational in the legal sense.

Mr Justice Barr emphasised that “the obligation contained in s. 9(3) of the 1977 Act, to hold consultations ‘at the earliest opportunity’ […] has to be considered within the practicalities of life on the ground at that time” and that having regard to the “dire financial and trading history of the appellant”, it had to be apparent to the board of directors that collective redundancies would need to be made once funding was withdrawn by the appellant’s parent company.

Dismissing the appeal against that finding, the court moved to consider the appellant’s challenge to the finding that the consultative process only started on 17 April 2020.

In this regard, Mr Justice Barr considered that the Council Directive 98/59/EC of 20 July 1998 and the 1977 Act do not state that a consultative meeting represents the start of the consultation process.

The judge was satisfied that “the provision of information concerning the proposed collective redundancies is an integral part of the consultation process” and so that process started upon the sending of an email by one of the directors to the respondent’s trade union representative with information about the proposed redundancies on the evening of 14 April 2020.

Accordingly, the court determined that the Labour Court erred in that finding.

As to the appellant’s challenge to the finding that that options were lost due to any delay between 9 April 2020 and the holding of the first consultative meeting on 17 April 2020, Mr Justice Barr confirmed that this finding was made by the Labour Court in the absence of evidence and could not stand.

Moving to consider the compensation awarded to the respondent, the High Court made it clear that “there was no evidence that the respondent had lost any pecuniary benefit, or suffered any financial loss, because of any delay on the part of the appellant in commencing consultations with the union representatives”.

The court opined that while compensation “is not limited to compensation for financial loss, it must be referrable to some form of loss or injury suffered by the person being compensated” and highlighted that that the power to award compensation under s.11A(c) of the 1977 Act “is not the imposition of a penalty against the employer”.

Mr Justice Barr found that there was no evidence before the Labour Court that the respondent had suffered additional distress due to any perceived delay on the part of the appellant.

The judge reasoned that in light of the financial state of the company at that time, if directors had tried to make any payments to or beneficial deals with employees prior to the appointment of the provisional liquidators, those payments and deals would have been struck down as unfair preferences pursuant to ss. 604 and 608 of the Companies Act 2014 (as amended).

Accordingly, in the absence of any loss on part of the respondent by virtue of delay in respect of the commencement of the consultation process, the High Court found that the Labour Court erred in awarding compensation to the respondent.

Conclusion

Accordingly, the High Court allowed the appeal.

Debenhams Retail Ireland Limited (In Liquidation) v. Jane Crowe [2025] IEHC 141