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Lloyds/Sainsbury’s enhanced redundancy claims update

This is the third update of January 2024 for PDA members regarding the announcement that Diamond DCO Two Ltd, formerly called Lloyds Pharmacy Ltd, is considering voluntary liquidation. 

Fri 26th January 2024 The PDA

Earlier this month a preliminary employment tribunal hearing was held for the claims that were issued for PDA members who had been employed in Lloyds Pharmacy’s situated in Sainsbury’s stores and who had been made redundant last year. This hearing was to allow the Tribunal to make Case Management Orders to enable the parties to properly prepare for the final substantive merits hearing.  

PDA lawyers who attended the hearing reported:

 An application was made on behalf of Lloyds for the case to be ‘stayed’ (i.e. put on hold) for a period of 28 days

  • The reason given by the Lloyds legal representatives for requesting the stay was that they had only very recently become aware that Lloyds had gone into administration and that it was in the process of going into liquidation. The legal representatives were not able to confirm that the business name had changed to Diamond DCO Two Ltd.
  • The PDA stated it’s position that it had become aware from Companies House register that Lloyds Pharmacy Ltd had changed it’s name to Diamond DCO Two Ltd, that the company had not gone into administration and that the company were seeking to start creditor’s voluntary liquidation on 16/01/2024.
  • As the position before the Tribunal was unclear, the Tribunal decided to postpone and relist the Preliminary Hearing.
  • Lloyds Pharmacy Ltd/ Diamond DCO Two Ltd  (‘the Respondents’ in these proceedings) were given 7 days by the Tribunal to provide clarification of the position of the business with regards to it’s name and status (i.e. whether it was in administration and/or liquidation)
  • It has now been confirmed by the representatives of Diamond DCO Two Ltd, that :
    • The Respondent has not entered administration;
    • The Respondent entered creditors’ voluntary liquidation on 16 January 2024;
    • Lloyds Pharmacy Limited changed its name to Diamond DCO Two Limited on 30 November 2023.
  • As the company has only entered creditors’ voluntary liquidation, and not entered administration or compulsory liquidation the claims can continue, without the need for any consent from the Courts, unless the Tribunal receives a Court order preventing it from continuing with the proceeding.

The PDA recognises the surprise announcement that their former employer was being placed into liquidation will be a bitter blow for members who will be concerned that they may not now secure justice for the loss of their enhanced redundancy entitlement. The liquidators have provided further information about the significant debts owed by the company which includes address details of the claimants. This is standard practice for liquidators who have statutory responsibilities for disseminating information.

Due to the company decision to go into liquidation, the tribunal claims by members face some challenges ahead. Even if these claims proceed to a final substantive hearing and a tribunal upholds them, there is a very real risk the company will have no money to pay any compensation awarded. Successful claimants would be deemed unsecured creditors and sit below other priority creditors for any money that may be left. 

Following legal research by PDA lawyers the company have been asked to confirm if there is business indemnity insurance in place, which would extend to paying out compensation. If the Respondent did have Business Indemnity Insurance then the PDA will ask the Insurance Company to be added as a party to these proceedings in the hope that any successful award can be claimed against the Insurance Company.

Once there are further significant developments, the PDA will issue another update.

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The Pharmacists' Defence Association is a company limited by guarantee. Registered in England; Company No 4746656.

The Pharmacists' Defence Association is an appointed representative in respect of insurance mediation activities only of
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