Thomas Cook: Employees guide to redundancy

At 02:00 this morning, Thomas Cook, a 178-year-old airline and holiday company, closed its doors and ceased trading. After a period of actively seeking to secure a rescue deal, Thomas Cook’s largest shareholder, Fosun Tourism, failed to secure the further £200 million required to gain their bondholders approval, causing the company to enter compulsory liquidation.

The collapse of Thomas Cook has caused the complete cancellation of all future Thomas Cook services, the stranding of 150,000 Britons, but most worryingly, the redundancy of 21,000 employees across the globe. For those that have been made redundant, there will be wide-ranging worry and uncertainty about their next steps. This guide will set out the first steps that the 9,000 former Thomas Cook employees in the UK can take to claim any outstanding payments they are owed, and the impact of unemployment benefits upon their claim.

What am I owed?

As a former employee of Thomas Cook, you are able to pursue a claim for all of your outstanding pay from the relevant insolvency practitioner. However, the amount that you can recover will depend upon the capital that can be raised by the sale of your employer’s assets; which often means that former employees are unable to recover their money from their employer. This being the case, the Government allows former employees of wound-up companies to claim against the National Insurance Fund. This ensures that all employees are able to reclaim the ‘basic minimum’ of debts owed to them. To calculate your ‘basic minimum’, we combine the following payments:

1. Up to a maximum of eight weeks wages (capped at £525 per week).

2. Up to a maximum of six weeks holiday pay (capped at £525 per week).

3. Redundancy pay (capped at £525 per week).

  a. Half a week’s pay for each full year you were employed and under 22 years old

  b. One week’s pay for each full year you were employed and between 22 and 40 years old

  c. One and half week’s pay for each full year you were employed and 41 or older

4. Statutory notice pay (capped at £525 per week).

  a. One week’s notice for every year you were employed, up to a maximum of twelve weeks.

It is worth noting that any statutory notice payments will be calculated with the assumption that any Claimant is claiming ‘Job Seekers Allowance’ and any claim against the National Insurance Fund will be lowered to reflect this, regardless of whether the Claimant is receiving it or not. With this in mind, it is of paramount importance that you apply for any unemployment benefits available to you before making a claim.

How can I claim?

To claim the owed ‘basic minimum’ from the National Insurance Fund, you must be a UK or European Economic Area national, and have worked under an employment contract with Thomas Cook. If this is the case, you can then apply to the Department of Business, Energy and Industrial Strategy (DeBIS), who will pursue a direct payment from the National Insurance Fund on your behalf.

To apply for a National Insurance Fund Payment, two separate applications need to be made. The first application needed is a claim for redundancy, unpaid wages and holiday pay. To make this application, you will need your ‘CN’ case reference number, which will be provided by Thomas Cook’s insolvency practitioner. This number can then be used to complete your initial application to DeBIS, which must be made before any application statutory notice pay can be made. As noted above, this initial claim must be made within 6 months of being made redundant, and cannot be made outside of this timeframe.

After making the first application, an application for statutory notice pay can be submitted. To make this application, you need the ‘LN’ reference number that will be provided within 12 weeks of your redundancy by the insolvency practitioners. This reference number can then be used to make your final application for any statutory notice pay owed.

After submitting your applications, it can take up to 6 weeks to process your payment. However, due to the likelihood that DeBIS will be inundated with applications due to the collapse of Thomas Cook, it is likely that the process period will be heavily delayed.

Can my application be rejected?

It is possible for applications for National Insurance Fund payments to be rejected. If this does occur, contact the Redundancy Payments Service as soon as possible, who will explain why your application was rejected.

If you disagree with the Redundancy Payments Service’s decision, you can make a claim to the employment tribunal, where you can pursue a claim against the Secretary of State for DeBIS, and Thomas Cook.

Need further help?

If you are a former employee of Thomas Cook and require further advice, please do not hesitate to contact us on:

Telephone: 0191 500 6050

E-mail: info@naughtons.co.uk

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