Thomas Cook is no more – what now for its 21,000 staff?

With another rescue deal for long-suffering firm unlikely, Thomas Cook employees are set to lose their jobs

(AP)

The collapse of Thomas Cook has left over 150,000 UK holidaymakers currently abroad facing a premature end to their holiday. For hundreds of thousands of others, who were yet to travel with the company, the only remaining option is to claim their money back.

But for Thomas Cook’s 21,000 employees, the end of the line for Britain’s oldest travel firm means something much worse: the loss of their jobs. That is usually the outcome of the type of the insolvency procedure used to wind up the company – a compulsory liquidation.

“Generally on a compulsory liquidation, with some exceptions, staff unfortunately lose their jobs as the business quickly ceases trading,” explains Emma Shipp, partner at law firm Hewitsons.

“It may be that certain parts of the business will be bought out, in which case the employment contracts of staff working in that area will be transferred with the business, but that depends on buyers coming forward very quickly and there seems no indication of that at present.”

Only a small number of Thomas Cook employees – those needed to help with its liquidation – are likely to keep their jobs, Ms Shipp adds.

On Monday, the TSSA union, which represents many Thomas Cook employees, said it is seeking urgent meetings with the company’s administrators to discuss saving the firm by selling it to new investors.

But such a turnaround seems improbable given that the only rescue deal put forward so far has fallen apart over the long-suffering firm’s lack of top-up funds.

This leaves Thomas Cook’s staff – 9,000 of them in the UK – hoping they can at least get paid for September.

An information web page set up by government says the company’s UK staff can apply to the Insolvency Service for redundancy and other payments, including any wages owed. Claims are paid within 14 days on average, although the service plans to pay sooner “if practicable”, it says.

However, the payments are subject to certain limits and so may not be paid in full, points out Ms Shipp.

“Say, if you’ve got a very highly paid pilot, they may not get back in full what they’re owed,” she notes.

Thomas Cook had been in talks with Chinese conglomerate Fosun over a capital injection and break-up of the firm that would ensure its survival. But the rescue plan collapsed when Thomas Cook was unable to find an additional £200m demanded by its banks as part of the deal.

“Fosun confirms that its position remained unchanged throughout the process, but unfortunately other factors have changed. We extend our deepest sympathy to all those affected by this outcome,” the Chinese company said.