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Thomas Cook collapse leads to Employment Tribunal claims

November 22, 2019
Employment Law

Over recent years, we have become used to some of our biggest high street names finding themselves in financial difficulty.  Often, struggling businesses are placed in administration; this is a form of insolvency proceedings aimed at rescuing the business as a going concern and getting it back on its feet.  The prospect of keeping the business going and saving people’s jobs is an attractive one.  But sometimes, it doesn’t work out that way.

What about Thomas Cook?

Very sadly, when Thomas Cook’s problems came to a head recently, rather than the company entering administration, it was almost immediately put into compulsory liquidation.  This meant that a large number of employees were dismissed with immediate effect, without notice and without any guarantee that the employees would receive any of the sums due to them.

In a recent article on the BBC website, they announced that a group of over 100 former Thomas Cook employees were commencing Employment Tribunal proceedings against the company.  No doubt they may be pursuing various sums due to them as a result of the termination of their employment.  One of the claims will undoubtedly be for a ‘protective award’.  This award can be worth up to 90 days’ pay.  It is awarded in cases where an employer, without complying with strict obligations to inform and consult, has dismissed by reason of redundancy 20 or more employees within a 90-day period.

Meaningful claims?

Of course, it’s all very well the Thomas Cook employees pursuing claims of this nature.  But what if there is no money left in the coffers to settle these liabilities?  In such cases, it may be that the National Insurance Fund has to foot the bill.  The use of public money to meet the cost of debts run up by private sector companies is not ideal.  By the same token, it’s a safety net that we might all hope to avail ourselves of if we were to find ourselves in similarly precarious circumstances.

Do you need our help?

We have been assisting a number of businesses with their restructuring plans over the last few months.  If you need advice on issues of this nature, please get in touch.

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