Judge orders redundancy payouts to failed contractor’s staff

A judge has ordered failed contractor Hadden Construction to pay axed staff 90 days’ income after it breached employment laws.

Scottish employment tribunal judge Ian McFatridge ruled that the Perthshire firm had failed to comply with its employee-consultation obligations under trade union and labour relations law.

Hadden Construction announced on 10 September 2024 that it had entered administration. Work stopped on sites and 66 people were made redundant.

Ben Cairns and Jonny Marston from consultancy Alvarez & Marsal were appointed as administrators and said they would oversee an “orderly wind-down” of the firm’s operations.

A group of 23 former staff members later made a claim against Hadden, saying the company failed to follow correct redundancy processes regarding the election of employee representatives.

According to the tribunal judgement, the administrators responded in January and did not contest the claim.

McFatridge said Hadden “failed to ensure that employee representatives were elected in accordance with section 188A [of the Trade Union and Labour Relations (Consolidation) Act 1992] and then to consult with them in accordance with section 188”.

He added: “The tribunal makes a protective award in respect of the claimants as employees dismissed as redundant by the respondent at their site at 1 Maidenplain Place, Aberuthven, Perthshire.

“The respondent is ordered to pay remuneration for the protected period. The protected period begins on 10 September 2024 and is for 90 days.”

Hadden Construction, a main contractor, reported a pre-tax profit of £230,000 on a £30.2m turnover in its most recent accounts for the year ending 31 March 2023.

In those accounts, then director Anne Nicol wrote that pandemic aftershocks had caused “slippage in programmes” both on site and during preconstruction.

She added that most of the firm’s turnover came from framework projects, two-stage tendering and partnerships, enabling it to “negotiate better terms in relation to pricing and programme risk”.

Hadden had three divisions: construction, homes and general works, where it had picked up some concrete remediation projects.

Alvarez & Marsal has been contacted for comment.