27 September 2019 #Employment
The former employees are claiming Thomas Cook failed to consult or inform them about their impending redundancy.
Employers are obliged to consult on a collective basis if they are proposing to make 20+ employees at one establishment redundant within a period of 90 days.
Each branch of Thomas Cook will be considered a separate establishment and most branches will have employed fewer than 20 people. Only employees employed at establishments with 20+ employees, such as larger branches, head office or call centres will be able to bring claims.
Each successful employee could be entitled to a protective award of up to 13 weeks’ actual pay.
In reality, because the business has collapsed into liquidation, any protective awards will be paid from public coffers by the National Insurance Fund, which treats them as a form of arrears of pay. The maximum amount of any such payment, including any protective award, is capped at 8 weeks' pay and each week’s pay is capped at a maximum of £525. The National Insurance fund will also pay their redundancy payments.
However, that does not necessarily mean that the directors of Thomas Cook are off the hook. Employers also have to notify the department for Business, Energy and Industrial Strategy (BEIS) where they are proposing 20+ redundancies at one establishment within 90 days. Failure to provide the notification is a criminal offence and the directors can face an unlimited fine. In recent years, where high profile insolvencies have left the taxpayer picking up huge tabs, BEIS has actively prosecuted directors.
For advice on redundancy consultation, please contact our employment team.