What will happen to employees following the Enfield Best Buy closure

Last week, in a major announcement, Carphone Warehouse confirmed it will close 11 Best Buy stores across the UK.  This will see hundreds of employees at risk of losing their jobs despite Best Buy Enfield only having been open for approximately three months.

Local residents will recall the grand-opening of the store over bank holiday weekend in August with promises of cut price electrical goods and discounts on all domestic appliances heavily advertised. 

Although only approximately 150 jobs will be placed at risk at the Enfield store, the cumulative closures will place over 1000 jobs at risk although Carphone Warehouse appear to be expressing a commitment to find the “large majority” alternative work.

Best Buy are part of Best Buy Europe, a joint venture between US group Best Buy and UK giant Carphone Warehouse.  The first of the UK Best Buy stores opened in April 2010 however just 18 months later a failure to make profits has left no option but to announce closures. This breaking story is just one of many which has seen major retail giants crumble due to economic instability in these turbulent financial times. 

When Best Buy entered into the UK retail market, Carphone Warehouse had announced plans to open 200 stores across the UK and Europe.  Unfortunately, these plans have been short lived with the focus now changing to selling the goods which used to be retailed from Best Buy stores from Carphone Warehouse stores and outlets within UK and Europe instead. 

Best Buy have now started a three month consultation process with affected employees in advance of store closures although they are hoping not to leave many employees jobless. 

Why a three month consultation?

By law, Best Buy will have been obliged to have given as much warning as possible of the impending redundancies. In broad terms there are three main redundancy situations, two of which are:

(i) Closure of the business as a whole

(ii) Closure of the particular workplace where the employee was employed. 

Dismissal of employees is deemed to be for redundancy if the dismissal is attributable wholly or mainly to the fact that the actual business has ceased or intends to cease trading. A Court would never investigate the commercial merits of an employer’s decision those redundancies were required but would consider whether the overall procedures followed were fair. Although the ACAS code of practice does not apply to redundancy dismissals, from case law the following guidelines have emerged:

• Consult with employee representatives if more than 20 or more employees to be dismissed for redundancy within 90 days or less

• If over 100 employees affected begin consultation at least 90 days before first dismissal

• If at least 20 but less than 100 employees affected begin consultation 30 days before first dismissal.

• Consider alternatives to dismissal

• If redundancy necessary then agree selection criteria with representatives

• Apply criteria objectively (no biased)

• Inform employees of scores and allow opportunity to contest scores

• Investigate possibilities of offering other employment within company/group

• If dismissed by reason of redundancy allow right of appeal

• Pay all money due including statutory redundancy pay if applicable

Employees may be fortunate in escaping redundancy and offered suitable alternative employment to work at a different location or branch of a Carphone Warehouse store.

Unfortunately employees dismissed from Best Buy Enfield are unlikely to qualify for any statutory redundancy payment or eligible to claim for unfair dismissal if the proper procedures were not followed as the store only opened in August.  Employees without one complete year’s service are not entitled to bring claims for unfair dismissal unless under a protected ground, in which case advice should be sought.

Worse still, employees who fall short of two years service would also not be entitled to receive any statutory redundancy pay leaving them high and dry at a time when they were glad to have found employment earlier in the year despite unemployment numbers rising in the UK.

Unfortunately Best Buy is just one of many businesses facing difficult decisions to make closures so that they can stay afloat. But in doing so they need to ensure that they follow fair procedures to ensure employees are not left knocking on the tribunal’s door claiming unfair dismissal.

If you an employee of Best Buy, or a business or individuals going through a redundancy procedure and need legal advice on your rights and obligations please contact Kaajal Nathwani on 0208 363 4444 or alternatively on kaajal.nathwani@curwens.co.uk. 

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