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Over 400 former Debenhams staff to receive £860,000 in redundancy payments

By Nithya Bose in UK Business News, posted August 31, 2023

More than 400 former Debenhams employees are to receive a collective payout of approximately £860,000.

The ruling follows a successful legal battle against the retailer, which went bankrupt over two and a half years ago.

According to lawyers representing the former staff, the tribunal judge ruled the firm failed to consult with employees at risk of redundancy.

Debenhams' fall into administration in 2020 marked one of the UK's most significant retail collapses.

It resulted in over 10,000 job losses, mainly due to the impact of national lockdowns during the Covid pandemic.

The settlement was made by law firm Simpson Millar on behalf of the former staff.

It relates to claims from those based in its iconic London Oxford Street store.

Under this agreement, the 419 affected staff may receive compensation of up to 90 days' gross pay, capped at £4,304, as the retailer remains insolvent.

A government-funded redundancy scheme designed to aid employees when their employer has gone under will source this money.

Amanda McKinley, a lawyer at Simpson Millar, said: “In this case the employment tribunal judge has ruled that the retailer failed in its duty under UK employment law legislation to carry out proper consultation with staff at risk of redundancies, and the outcome of the legal action now paves the way to secure a payout in the form of a protective award for our clients which is expected to be in the region of £860,000.”

475 staff will get payouts

Simpson Millar also represents an additional 475 people who filed claims against Debenhams and await final judgments.

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Ms McKinley added: “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 that the matter is now coming to a close so that they can finally move forward with their lives.”

This comes at a challenging time for another retailer, Wilko, which recently entered administration, putting over 12,000 jobs in jeopardy.

Wilko is actively seeking bids that may rescue some or all of its stores.

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