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What is the redundancy situation for Thomas Cook employees?

Posted on: Thursday 19th March, 2020

What is the redundancy situation for Thomas Cook employees?

The demise of Thomas Cook has left an estimated 9,000 UK employees facing financial uncertainty. Their employer has gone into liquidation, which means eligible members of staff can claim statutory redundancy pay.

The right to claim statutory redundancy depends on an employee’s length of service, with the minimum timescale in this respect being two continuous years. Other statutory entitlements may also be available, including arrears of wages and holiday pay.

So how is redundancy pay calculated, and what other entitlements might former Thomas Cook employees be entitled to?

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Calculating redundancy pay

Redundancy pay calculations incorporate an employee’s age, length of service, and weekly wage:

  • Aged under 22: half a week’s pay for each full year of service
  • Aged 22-40: one week’s pay for each full year of service
  • Aged 40 or over: one and a half week’s pay for each full year of service

Limits have been set for these figures, however:

  • Weekly pay is currently capped at £525
  • The maximum amount of statutory redundancy payable is £15,750
  • Length of service is capped at 20 years

Other statutory entitlements in redundancy

Members of staff could also be eligible to claim:

  • Arrears of pay (up to eight weeks)
  • Holiday pay (up to six weeks)
  • Notice pay

Some of the company’s former employees may be able to make a further claim for a ‘protective award’ of up to 90 days’ gross pay in accordance with the Trade Union and Labour Relations (Consolidation) Act, 1992. This is in relation to their right to collective consultation prior to being made redundant.

What is a protective award?

If more than 20 people are made redundant from one establishment within 90 days, the company in question must undertake collective consultation procedures. The fact that the company is no longer trading doesn’t affect employees’ rights to be consulted with regard to redundancies.

  • If 20-99 staff redundancies are made, consultation should be carried out at least 30 days beforehand
  • Where redundancies total 100 members of staff or more, consultation should take place at least 45 days beforehand

How do Thomas Cook staff claim redundancy pay?

When an employer has gone into liquidation employees can claim their redundancy pay from the National Insurance Fund (NIF) rather than the company. The government has provided instructions online for former Thomas Cook staff on how to claim redundancy payments, with specific details of who the staff in various Thomas Cook departments should contact.

Redundancy payments are typically made around 14 days following receipt of a claim, but the government also states that special arrangements may be put in place to fast-track claims and payments where possible in relation to Thomas Cook.

Redundancy Claims UK are redundancy experts and can provide more information on how to make a claim. We’re also specialists in claiming director redundancy. Please contact one of the team to arrange a free same-day consultation. RCUK are Authorised and Regulated by the Financial Conduct Authority. Authorisation No 830522. You can check our registration here.

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