STAFF at People’s Energy have begun the process of taking legal action against the company after it folded and went into administration.

It has been alleged that the energy company, started by David Pike and Karin Sode from Gullane, failed to properly consult staff during the redundancy process. The company declined to comment on the claims.

News of the collapse of the community-owned gas and electricity firm broke last Tuesday, after it was reported that People’s Energy was unable to agree terms with energy suppliers.

The company had premises in Musselburgh, later expanding to Shawfair in Midlothian.

About 300 members of staff are understood to have been made redundant, including 200 in Shawfair and Musselburgh, and a further 100 employees in Selkirk in the Scottish Borders.

Law firm Simpson Millar says it has been contacted by several former workers who claim they were not consulted over the job losses, adding that its specialist employment team has now begun investigations and is looking to secure a protective award for those affected.

A protective award is a payment awarded by an employment tribunal in cases where an employer fails to follow the correct procedure when making 20 or more redundancies.

Where an employment tribunal is in the favour of the employees, they will be able to access the funds via the Government insolvency service of up to £4,352.

In response to this, Simpson Millar has launched an eligibility checker that people can use to see if they are eligible to make a claim. It can be accessed at simpsonmillar.co.uk/peoples-energy-utility-point/people-s-energy-pa

Anita North, an employment law expert at Simpson Millar, said: “Sadly, the collapse of People’s Energy has left many former employees out of work with little more than a moment’s notice, and likely worried about finding alternative work given the current climate.”

She added that, while many would assume the company would not have to follow the correct employment procedures because it had gone into administration, it still had a duty of care to staff under current employment laws.

She said: “Regardless of whether a company is struggling financially, they still have a duty under current employment law legislation to carry out a proper consultation with staff at risk of redundancies. Where that does not happen, employees can bring a claim for a protective award.

“When people are made redundant, the first thing they normally do is look for another job, but in the current climate new jobs are very rare and competition for each role is significant.

“As a result, people are having to prioritise taking measures like applying for Universal Credit and mortgage holidays in order to be able to survive financially.”

A People’s Energy Company spokesperson, asked to comment on the allegations, said: “The company is commencing information gathering and consultation with employee representatives and does not intend to comment further at this time.”

When People’s Energy’s folded last week, a statement on its website read: “Please rest assured that your energy supply is secure and all account credit balances are protected for our domestic customers. This includes any recent top-ups that were made as part of the seasonal weighting initiative.”