As we digest the news that yet another retail giant will be disappearing from our high streets, thoughts turn to the 2,500 Mothercare staff who are coming to terms with losing their jobs seven weeks before Christmas.
Mothercare has struggled for some years in the face of competition from supermarket clothing lines, but after failing to find a buyer, the worst fears of staff have been realised with the impending closure of all 79 stores.
Even when the writing is on the wall, as was the case for Mothercare, redundancy can still be devastating for employees who face months of uncertainty and job hunting.
When a company goes into administration, employees must apply to the government for a redundancy payment, holiday pay, outstanding payments and statutory notice pay (money you would have earned working your notice period).
Here are some useful points to note:
- Without two years’ service you will not be entitled to a redundancy payment.
- When a company closes down, staff aren’t given notice pay or redundancy pay, however, this can be claimed through the government online. To be eligible you must have been an employee – not a worker (casual) or self-employed. There is also a process for claiming lost notice pay.
- There are lots of rules around the claims such as caps on how much will be paid out and what happens if you get a new job with an ‘associated employer’. Get in touch if you need more detailed advice on these issues.
- If your company closes down and everyone is ‘redundant’, the employer must have a consultation about why redundancies are happening and whether there are any alternatives. Failure to consult can result in a claim which can provide up to 13 weeks’ gross pay per employee. The issue is showing that the employer knew they were going to close and so they should have consulted before doing so. Administrators can argue that there simply wasn’t the time or funds to consult. Claims for compensation for ‘failure to consult’ do happen but aren’t straightforward and if the company has no money, there may little point in pursuing a claim.
- If the company is rescued by another company, TUPE may apply, providing the company is fundamentally the same.
It is a sad fact that the notion of a job for life has been consigned to history and job security is a thing of the past. One can only hope that Mothercare employees across the country are successful in finding new jobs as soon as possible.
How we can help
If you find yourself in a redundancy situation and are unsure how to proceed, it would be wise to seek expert advice. We offer a number of fixed fee appointments to support employees:
- Initial one-hour appointment with an employment solicitor: £100+vat
- Redundancy claim advice one-hour appointments: £100+vat
- Settlement agreement appointments (usually paid for by your employer)
- Tribunal procedure one-hour appointment: providing detailed advice on claim procedure, supported by a fact sheet: £225+vat