It is more than two years since Paperlinx went bust, with 700 of its circa 1,200 UK employees laid off immediately when the company went into administration on 1 April 2015.
The Protective Award claim involves more than 400 employees, who are pursuing a claim for failing to consult. If successful they will be eligible for a payout from the government of up to 90 days’ pay.
A five-day hearing had been scheduled to begin on 30 May, but this has now been deferred until 24 July, following a hearing before the Regional Employment Judge.
Morrish Solicitors, which is representing most of the employees involved in the claim, said in a letter to its clients that while its team had been ready for the May hearing, there had been hold-ups elsewhere. “The Regional Employment Judge did not believe there was now sufficient time for all the parties to be ready for the hearing at the end of May. This is despite the fact that we were ready. Unfortunately, all the other legal representatives explained that they were not. In particular, there have been big delays with Thompsons Solicitors who have consistently been unable to comply with a number of the Tribunal’s orders.”
Thompson Solicitors is representing former employees who were members of union Unite.
However, Robert Smith, employment law solicitor at Thompsons Solicitors, defended the firm’ position. He told PrintWeek: “The main issue is identifying whether there were enough employees at each location. This is quite a difficult process and we’ve been relying on the administrators’ solicitors to guide us through.”
He said the multi-site, multiple company setup within the Paperlinx organisation had complicated matters, and said that administrators at Deloitte were being robust in their defence of the action.
“It is being quite actively defended by the administrators, which again is unusual. They want to show the Insolvency Service they have done everything they can to limit the claim by reducing the liability. They are entitled to do that but it has made it more complicated,” he explained.
“Come the hearing we also want to be in a position to challenge their assessment if necessary,” he added.
Paperlinx had a number of subsidiaries, including its three main trading entities Robert Horne Group, The Paper Company, and Howard Smith Paper. As a result, even though there could have more than 100 people working at an individual location, the use of multiple entities means that some Protective Award claims have fallen by the wayside due to there not being the requisite 20 or more employees per limited company.
For example, some of the former employees based out of Paperlinx’s Glasgow operation were recently told by Morrish that it had emerged there had actually only been 18 Robert Horne staff registered at that site, so they were advised to withdraw their claim.
One former employee was sympathetic to the challenge faced by the solicitors dealing with the case. “They've been waiting for Deloitte and Paperlinx to agree who worked where and for whom for months and they've only just got this info, therefore they are having to withdraw claims that will fail so the ones that can succeed can proceed.”
Another ex-staffer expressed their frustration: “After nearly 25 years working with the group I find it totally sickening that unless you worked at head office or a larger site you have been totally shafted regarding any further claim.”
Thompsons’ Smith added: “It has taken a long time but it’s important to get it right as we want to make sure as many people as possible get their Protective Award. The hearing is listed for five days and that reflects the complexity of it – you don’t get many that are more than one day.”
When Paperlinx went bust it owed HMRC £10m in VAT and had a £180m deficit in its pension schemes. The Howard Smith scheme entered the Pension Protection Fund in January, but the Robert Horne scheme, which had a massive £153m deficit, remains in assessment.
Paperlinx’s Australian parent company has since been renamed Spicers.
