ilke Homes is facing legal action over the way its redundancy process was managed as it fell into administration.
Nearly 160 former employees who lost their jobs when the modular housebuilder collapsed last week have retained employment law experts Aticus Law to determine if they can claim for a Protective Award – or compensation by employment tribunal.
ilke Homes Limited filed an application notice to appoint administrators with the Companies Court on Friday (30 June) and financial advisory firm AlixPartners was appointed as joint administrators at the request of company directors.
Up to 1,150 staff were made redundant, while some were retained in the short-term to assist administrators in winding up the company’s affairs.
ilke’s 250,000 sq ft light gauge steel frame factory in North Yorkshire also closed immediately and all site activities have now ceased.
Since then, staff reportedly told Aticus Law they were sent home by management around two weeks ago with pay, but were made aware at the time the company was in trouble and looking for a new investor.
But the financially struggling firm failed to find a buyer or a fresh injection of capital after weeks of trying.
Then, last week, staff were called to a meeting where they were told they were being let go, a spokesperson for Aticus Law said.
Aticus Law added if staff can pursue a claim for a Protective Award and are successful, they could receive up to eight weeks’ worth of pay in compensation, with a cap of £571 per week.
In December, ilke announced it had secured £100 million of new equity investment after Citigroup and affiliates of Fortress Investment Group arranged a funding round.
Despite being founded just five years ago, ilke had seen its revenue grow by more than 150% annually, it reported. It delivered more than 1,000 modular homes a year and had a pipeline of 4,000 more as of December 2022, it added.
However, ilke suffered inflationary pressures and a lack of land supply linked to planning processes. It is understood investors ‘pulled funding due to cashflow concerns’.
Other investors had been TDR Capital and Sun Capital.
“Further to the collapse of Ilke Homes, we have been instructed by  former employees who have lost their jobs and who are now looking to pursue a Protective Award against the company,” said Edward Judge from Aticus Law.
“While there are reports to suggest that the business will be bought out of administration, this does not prevent people who have already been made redundant from pursuing a claim even if they are offered their jobs back in due course.
“Of course, for many of our clients that would be the ideal outcome, but the Protective Award is claimed because the redundancy process was not followed correctly, which of course has a short-term impact on a person’s financial wellbeing.”
AlixPartners was approached for comment.
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