Losing your job is almost never good news, but being made redundant at least comes with some compensation for many.
And now, a top employment lawyer has revealed that the way Thomas Cook made many of its staff redundant could mean hundreds and hundreds of them are in line for an extra payout that could be worth thousands each.
Aneil Balgobin, a specialist employment law Partner at Simpson Millar, said: “This has been a very upsetting and distressing time for the former Thomas Cook employees, many of whom were made redundant with a moment’s notice and who now face financial uncertainty whilst searching for a new role."
But just because a company has ceased to exist, it doesn't mean your rights disappear with it. And there are quite a few rights associated with redundancy.
“Many people mistakenly believe that if a business goes bust, that’s it! The staff are simply hung out to dry with no means of recovering what is rightfully theirs, but that isn’t the case," Balgobin said.
The better news is that certain claims by staff against a former employer are incredibly far up the list of debts companies are forced to pay when their assets are liquidated.
Including one for up to 90 days extra gross pay.
The rights you have
Ross Meadows, partner at Oury Clark solicitors, said: "Employees will have various claims against the insolvent employer including claims for unpaid salary, benefits and notice pay; statutory redundancy pay; and unfair dismissal."
Normally, these would be hard to get and worth very little - as staff debts rank very low on the list of legal priorities when a firm closes - but not quite all of them.
When 20 or more employees are made redundant at once, who haven't been given the required statutory information or a consultation, that counts as a "protective award".
And these are very high up the list of priorities indeed.
That means everyone from maintenance hanger crews, engineers and office staff and workers where there are more than 20 people could be in line for the extra cash.
Balgobin said: “It’s early days, but we are already receiving calls from those affected who are looking to pursue a Protective Award which, if successful, will see them compensated by up to 90 days' gross pay."
He added: “Staff were entitled to be consulted about the redundancies and that simply did not happen, in fact there was no consultation at all.
“There is no doubt that the affected staff and their families are going to need ongoing financial support in this difficult time and although this law is very niche, it is in place to protect workers in exactly this type of situation."
And that money comes on top of the cash standard redundancy money too.
"Any money is on top of statutory redundancy, notice pay, accrued holiday pay which is paid by a Government fund," Balgobin said.
“Workers need to know that they have the right to this extra money and is highly unlikely to be advertised."
Your other legal rights to compensation
Former employees of an insolvent company can claim from government instead of the defunct company.
There are limits, however, with £525 a week being the highest back the state covers - although for up to 20 years' service. But it's generally a lot less costly and simpler than dealing with the people managing the remaining assets of a dead company.
The person dealing with the firm's insolvency (the ‘insolvency practitioner’ or ‘official receiver’) is required to tell you how your job is affected and what to do next.
They’ll also give you a:
- RP1 fact sheet
- ‘CN’ (case reference) number to use when you apply for money you’re owed
With those, this is what can be claimed from the Government:
- A redundancy payment
- Holiday pay
- Outstanding payments like unpaid wages, overtime and commission
- Money you would have earned working your notice period (‘statutory notice pay’)
To claim from the state, you need to get an RP1 form, which is available from the Redundancy Payments Service. You’ll need to claim holiday pay and any wages you’re owed at the same time.
You can call the Redundancy Payments Service on 0330 331 0020, or email them on redundancypaymentsonline@insolvency.gov.uk
You can claim for loss of notice pay online if you have an LN number (generally sent after you claim for redundancy) here .
The Money and Pensions Service has produced a guide for former Thomas Cook staff you can read here
