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Thomas Cook failure could cost taxpayers £60m for staff payouts

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Written by: Emma Lunn
03/10/2019
The government is under pressure to make sure Thomas Cook staff are paid following the company’s collapse.

The Transport Salaried Staffs’ Association (TSSA) has urged the government to make sure Thomas Cook employees are paid following discussions with ministers and the liquidator.

Employees made redundant after their employer is declared insolvent can apply to the Insolvency Service for the money they’re owed such as your salary and holiday pay.

Manuel Cortes, TSSA general secretary, attended a meeting of the government’s Thomas Cook Taskforce in Manchester on Tuesday which discussed jobs, redundancy and compensation payments for former workers.

He said: “At meeting of the taskforce I once again pressed government ministers and the liquidator to pay our members what they are owed. I am pleased that the liquidator told me that they have now processed 99 per cent of the 5,000 claims they’ve had for redundancy payments.

“They have made interim payments totalling over £18m with more to follow. However, not every worker who lost their job has applied for redundancy. It’s vital they do so as quickly as possible.

“Those who were dismissed without notice or consultation have a legal claim for compensation and we have asked the liquidator not to contest such claims. This will result in payments being made to our members in a more timely fashion and without having to resort to litigation.”

TSSA has threatened to take legal action on behalf of members if the relevant payments aren’t made.

According to calculations by the PA news agency, taxpayers will have to stump up £60million to fund unpaid wages, holiday pay and redundancy costs for Thomas Cook’s 9,500 staff following the travel firm’s collapse last month. The cost is in addition to the repatriation exercise which the government estimates will cost £100m.

TSSA also challenged the liquidator to give assurances in writing that it won’t contest protective award claims – a compensation award of up to 90 days’ gross pay for failure to inform and consult in cases of dismissal on the grounds of redundancy.

It was also revealed that Thomas Cook had a support and wellbeing programme for staff that has been kept going by the liquidator until at least the end of this month.

About 1,500 Thomas Cook staff are still in employment – helping the liquidator wind-up the company and assisting with the repatriation. These employees have been given notice that their jobs are at risk of redundancy and consultation of sorts is taking place with them.

Another union, the British Airline Pilots’ Association (BALPA), reported on Monday that Thomas Cook employees expecting to be paid their salary at the end of September for work done up until the company went into liquidation on 23 September, hadn’t been paid.

BALPA raised the issue with the Thomas Cook Taskforce last week but were “met with blank faces” from two secretaries of state and the official receiver.

Brian Strutton, BALPA general secretary, said, “This is adding insult to injury. It’s awful enough for staff members to have lost their jobs overnight but to not receive salary for the work already done is absolutely disgraceful.

“It’s hard not to feel aggrieved at Thomas Cook management for this disaster. It is they who ran down cash so far that there isn’t even any left to pay wages owed, but did find the cash to keep the German airline, Condor, open for several days until the German government stepped in with some financing.”

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