High Court rules companies in administration can get access to the Chancellor’s job retention scheme – after Carluccio’s staff win landmark case
- Carluccio’s, which has 2,000 employees, went into administration on March 30
- Unite took legal action concerned about potential redundancies over Easter
- A judge directed that a government job retention scheme can be used by companies that go into administration during the coronavirus crisis
- Learn more about how to help people impacted by COVID
Employees at companies that go into administration amid the ongoing coronavirus crisis could get access to the Government’s job retention scheme – after staff at restaurant chain Carluccio’s won a landmark legal case.
Carluccio’s went into administration on March 30, casting a shadow over the future of its 71 UK restaurants and 2,000 employees.
The Unite union took legal action because it was concerned that those workers who had not yet responded to an offer by the administrators faced the prospect of being made redundant over the Easter bank holiday weekend.
Insolvency laws mean administrators have 14 days to make staff redundant in order to avoid liability for their employment and wages, meaning Easter Monday was the last day those staff could be dismissed.
But High Court judge Mr Justice Snowden’s direction means the scheme, announced by Chancellor Rishi Sunak as part of the Government’s business support package, can be used by companies in administration during the Covid-19 crisis.
Carluccio’s went into administration on March 30, casting a shadow over the future of its 71 UK restaurants and 2,000 employees (pictured: Carluccio’s restaurant in Cardiff)
Experts say the ruling provides ‘valuable breathing space’ to administrators in the wake of the coronavirus outbreak, and ‘may help save jobs’ that would otherwise be lost among financially troubled companies.
Howard Beckett, Unite’s assistant general secretary for political and legal affairs, said the ruling could provide a boost to staff at other firms recently entering administration.
He said: ‘Time was running out for some of our members in Carluccio’s.
‘They faced the prospect of being dumped out of work this weekend.
‘In taking this action, Unite has secured them some wage security.
A High Court judge’s direction means the Government’s job retention scheme can be used by companies in administration during the Covid-19 crisis
‘It is now essential that all those Carluccio’s workers who have either not received a letter or not responded to the letter from the administrator get in touch with their union, Unite, or the administrator immediately to ensure they are not dismissed and lose out on the opportunity that this court judgment has ensured.
‘We will not hesitate to go into court to ensure our members’ livelihoods are protected in these difficult times.
‘The new job retention scheme was put together in record time and its interaction with other areas of law, in this case insolvency law, needed to be looked at by the High Court.
‘This important decision ensures that no one is left behind in a hospitality sector reeling from the effects of the shutdown.’
He added: ‘This also ruling offers some hope to other workers who have been made redundant because their employers called in the administrators during this crisis, such as those at Beales and Debenhams.
‘I would urge these workers to speak to their trade union or contact the relevant administrator to find out if they can be helped in any way through these tough times.’
Administrators FRP, who were also called in after fallen high street giant Debenhams went into administration on April 4, said: ‘This provides valuable breathing space to administrators in the unprecedented circumstances created by Covid-19.
‘It may help save jobs that would otherwise be lost.’