7:55 am, August 21, 2023
Dealer group Listers has been ordered to pay furlough money to casual drivers after a judge ruled it had not followed government guidance when paying them during the lockdown.
A landmark case at Coventry County Court showed that the firm claimed four months of furlough payments for casual drivers at the start of the pandemic but staff did not receive all of what they should have been owed.
While it is not known exactly how many drivers were affected, four took the case to court after bosses refused to pay the additional month via the government’s Coronavirus Job Retention Scheme.
Anthony Sollis, David Howe, Jonathan Busby and a fourth employee who wishes to remain anonymous all tried to take up the problem with bosses but were refused the additional money, leaving them significantly out of pocket, according to legal papers.
After months of protracted wrangling, the case ended up in court, despite several attempts by Listers to have it thrown out.
The court was told that the four men were paid in arrears and received their wages on the 28th day of each month.
In March 2020, Sollis worked 135 hours, Howe 137.5 and Busby 176.5 before the UK went into lockdown on March 23.
On March 27, director Geoff Lister emailed all staff promising to pay 100 per cent of their wages for March before adding them to the furlough scheme for the coming months.
However, Listers, which came 20th in our latest Car Dealer Top 100 list, used April’s furlough cash to pay the men’s March wages.
The drivers then received no payment at all in April before being paid 80 per cent of their wages via the furlough scheme in May, June and July.
Due to the strict conditions surrounding employees receiving furlough, none of them were able to work elsewhere while receiving the government aid.
Defending its position in court, Listers denied any wrongdoing and said it refuted claims of ‘missing’ pay.
Instead, its barrister insisted the firm had followed government guidance to the letter when calculating payments owed to the drivers.
However, district judge Seanin Gilmore disagreed with the firm’s submissions and said it had used furlough money to pay hours already worked, in breach of government guidelines at the time.
She ordered that cash totalling £4,074.25 be paid to the claimants.
In a written judgment, seen by Car Dealer, the judge shut down claims by Listers’ director of finance, Tony Dadd, that there was no missing pay for the month of April.
She said: ‘In my Judgment, Cs [the complainants] are correct to point out that a month’s pay is “missing” by reason of D [Listers] conflating March’s wages and April’s furlough grant.’
She also ruled against his submission that the claimants receiving both their March and April pay via the Coronavirus Job Retention Scheme would have amounted to ‘double recovery’.
In her ruling, Judge Gilmore said: ‘The only reason why both payments were due in April is because D [Listers] had chosen to pay salaries one month in arrears whereas furlough grants were paid at the end of the relevant month.’
The ruling was passed down last year but has only just come to light.
All four plaintiffs have since been let go by Listers after receiving their P45s.
Listers told Car Dealer that it did not break the law and described the case as a ‘contractual dispute’.
A lawyer representing the firm said that in an effort to resolve the matter ‘amicably’, Listers offered to pay a sum in excess of the amounts claimed by the claimants to charity but this was turned down.
A spokesman for the dealer group said: ‘The case was in respect of four individuals who had no set contractual hours and we chose to furlough in order to protect their income.
‘If we had not furloughed them they would not have received any income during the various lockdowns.
‘The case was regarding a difference in opinion as to how to interpret the guidance regarding the payment of one month’s historic wages.
‘The judgment accepted that we had claimed furlough correctly and all furlough monies had been paid to the claimants however we were ordered to pay historic wages.
‘We accepted the Court’s decision and consider the matter closed.’
Furlough cash
Buoyed by sky-high used car prices, countless car dealers posted record profits during the Covid period, while also claiming millions via the Coronavirus Job Retention Scheme.
At the time, several national news outlets called on automotive firms to reimburse the public purse, given their spectacular results.
The likes of Marshall, Lookers and Inchcape all repaid the government support they were given, while Vertu boss Robert Forrester took the opposite approach.
He told Car Dealer at the time: ‘The government closed down our businesses by diktat with very little warning, causing considerable disruption and dislocation and they provided financial support to offset that.
‘That was what the support was there for – to make sure we didn’t come out of it in a much weaker position than we went in.’
Listers accounts from 2020 show that the firm claimed £13.34m in furlough cash in the 12 months to March 31, 2021, which was not repaid to the government.
During the same period the group made a pre-tax profit of £28.84m and paid its directors a whopping £7.12m.
Clarification: Prior to a revision of this story, we stated that Listers broke the law in relation to this case. This was a civil matter and means that was not the case. We are happy to clarify this.
