What compensation am I entitled to if I’m made redundant?
The sudden closure of Prime Seafoods will come as a horrendous shock to the company’s 70 employees.
When a workplace closes in a rural community, the loss of employment on a large scale is an absolutely devastating blow not only for the workers and their families, but also for the wider community.
It comes in the wake of a number of high profile chain stores which have disappeared from the High Street suddenly, leaving behind a trail of devastation.
Trading for a monumental 178 years before its collapse, travel giants Thomas Cook had 548 stores which closed without warning in September last year.
Thomas Cook is just one of the chain stores to disappear from the High Street. Woolworths, Toys R Us, Handmade Burger Co and Mothercare are just a few of the staples that disappeared almost overnight when the businesses collapsed into Insolvency. In a time where nearly anything can be bought online, a store closure shouldn’t seem like such a big deal. However, in a rural communities like Peterhead and Fraserburgh, it is unlikely that there will be enough other employers to give jobs to the employees who are ditched without warning.
Employees in these circumstances are often exposed to risk of not receiving the wages that they are due when the workplace closes. Why are employers allowed to run businesses into the ground and leave staff in this position?
Legally, employers are not allowed to sit back in the knowledge that their business is crumbling and hide it from their staff.
The law is clear that employers in situations like Prime Seafoods have a duty to consult with staff on ways to avoid dismissing staff or look at ways to minimise the impact of the redundancies.
Staff on ground level are sometimes the best placed to speak about working practices and what could be done better to avoid the company collapsing and, ultimately, save themselves from being out of a job.
The good news for employees is that they are entitled to compensation for the failure to consult. Employees who lose their job in circumstances are entitled to 8 weeks of pay for the failure to consult.
This compensation payment is known as a protective award. This is in addition to other payments that they are entitled to, including statutory redundancy pay, outstanding holiday pay, outstanding wages and notice pay. As the company has gone into Insolvency the payment of all outstanding sums will be made to employees through the Government’s Insolvency Service.
Although it defies logic that corrupt Directors can run a business into the ground and then have the tax payer pick up the bill, employees should ensure that they claim for all the sums that they are entitled to.
At Watermans we can pursue a claim for a protective award and guide you through the process of seeking any other payments that you are entitled to. Please contact us for a free assessment of your case.