Tribunal orders Pure Legal to make redundancy payments to staff

Tribunal: Claims well founded

An employment judge has ordered former law firm Pure Legal to pay 24 members of staff three months’ salary for not consulting before making them redundant last year.

Employment Judge KM Ross issued three decisions involving multiple claimants under rule 21, which is invoked when defendants do not either lodge a defence or contest the claim.

Regulated law firm Pure Legal was the principal trading entity of the Pure claims group, eight of whose constituent businesses went into administration in November 2021.

More than 200 people in the group, including 116 at Pure Legal, were put out of work, so these may be the first of many rulings.

The judge said the claimants’ complaint – that Pure Legal failed to comply with section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 – was “well founded”.

Under this, where an employer is proposing to make 20 or more employees redundant, it must provide information and consult the representatives of affected employees at least 30 or 45 days (depending on the number involved) before the first dismissal takes effect.

The tribunal ordered Pure Legal to pay, by way of a protective award, 90 days’ pay from 2 November 2021.

In June, the most recent update from Pure Legal’s administrators, Kroll, said the original directors’ statement of affairs predicted a claim of £10,730 in respect of employees’ arrears of pay and holiday pay, the majority of which would be recouped by the government following payments to employees by the Redundancy Payment Service.

Kroll said it considered this to be a “low estimate” but that it expected to have sufficient funds to pay preferential creditors – the employees and HM Revenue & Customs, which has claimed unpaid tax of £524,000.

The June report said the prospects of unsecured creditors of Pure Legal recovering any of the £23m they were owed dimmed significantly in the first six months of the administration.

Pure’s secured creditors – Perspective, owed £6.1m, and Novitas, owed £1.8m – would likely be repaid in full, the progress report confirmed, but it was not yet clear whether there would be enough to repay in full the £4.6m borrowed under the coronavirus business interruption loan scheme.

Last month, Kroll extended the period of administration, with creditors’ consent, to 1 November 2023.

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