Debenhams - what does this mean for the employees?

With Boohoo purchasing some of the assets of department store Debenhams, it is believed that its stores will not reopen, except to sell off stock. So, what does this mean for Debenhams’ employees?

In many cases, if business A buys the shares of business B, employees see no change at all. Business A might decide to restructure or move employees into their own business structure (or vice versa) but, generally speaking, that is stage 2 and might (or might not) happen some way down the line. Unfortunately, where a business is failing, something will have to change and the sooner the better.

Where business A buys the assets (or some of the assets), employees engaged in the part of the business that is bought should transfer to business A from B under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

Under TUPE, employees move across on the same terms and conditions of employment and have various protections against dismissal and the making of changes to their contracts of employment. In the case of Debenhams and Boohoo, those employees who work in the online part of Debenhams should, therefore, continue to be employed by Boohoo.

Julie Temple, an employment lawyer at Essex law firm Birkett Long, says that for those employed in-store at Debenhams’, or in more senior positions across the in store and online parts of Debenhams, the position is far less certain. They are unlikely to move across to Boohoo and may well be made redundant by Debenhams (unless any other buyer can be found).

This means some 20,000+ employees may be facing redundancy, a process that can be confusing at a worrying time. In response to this, Birkett Long has designed a free, easy to follow, redundancy kit, available for download to anyone facing redundancy.

According to the Office for National Statistics (ONS), more than 395,000 workers were made redundant in the three months to November 2020. The most recent unemployment rate - for September to November - was 5.0%. That is an increase of 0.6% over the previous three months and means that 1.72 million people were unemployed.

Birkett Long’s kit explains the process ahead, what redundancy procedures an employer must follow, examples of the kind of letters that might be received and guidance on what an employee needs to do.

Julie Temple, Head of the BLHR and Employment team has said: “We are really proud to be able to provide this free kit and offer support to our community. There is much going on in our lives and to be going through a redundancy on top of this must take its toll. We hope by providing this free kit, we can make sure the stress of the unknown is removed.”   

To access the free redundancy kit, please visit www.birkettlong.co.uk/redundancy-kit

If Debenhams are unable to pay, they may be able to recover minimum payments from the government and would have to make a claim against the Secretary of State and the National Insurance Fund.  

If you would like advice from our expert employment lawyers, please contact us on 01206 217318 or julie.temple@birkettlong.co.uk.