HR sector rallies to support Thomas Cook employees

Thousands of Thomas Cook staff are set to lose their jobs after last minute negotiations to save the travel firm failed.

Around 21,000 employees, 9,000 of whom are employed in the UK, are to be made redundant after the 178-year-old company ceased trading and went into compulsory liquidation this morning.

Peter Fankhauser, chief executive of Thomas Cook, said it was a matter of “profound regret” that it had been unable to secure a deal to save jobs and fulfil its obligations to customers and suppliers.

“Despite huge uncertainty over recent weeks, our teams continued to put customers first, showing why Thomas Cook is one of the best-loved brands in travel,” he said.

“Generations of customers entrusted their family holiday to Thomas Cook because our people kept our customers at the heart of the business and maintained our founder’s spirit of innovation.”

Thomas Cook’s HR team will need to provide as much support as possible to employees who have lost their jobs and handle the situation sensitively, advised independent HR consultant Natalie Ellis.

She told Personnel Today: “Thomas Cook has a very loyal workforce with careers spanning many years so this may affect those more than short-serving employees as they may not know anything else.”

She is asking the HR community to come together to help Thomas Cook staff in areas including CV writing, job searches and career coaching.

“The primary focus for employees will be upon their transferable skills. Moving between airlines is not always easy so we could help the employees to bring out their valuable skills such as customer service, management and problem solving,” she said.

“Additionally they may also feel lost when it comes to redundancy procedures and where to go for advice so we can also support with this too.”

CALL TO ACTION: HR professionals that have spare time to help the employees affected by #ThomasCookcollapse some may need careers advice, support with the shock of what’s happened etc. Is there something we can do as a HR community? Employees, if you need help, pls get in touch

— Natalie Ellis (@NatalieEllisHR) September 23, 2019

In the weeks leading up to its collapse, Thomas Cook’s pension trustees sought a continuation of the annual contributions designed to ensure its schemes remained fully funded. The viability of its schemes are being assessed by the Pension Protection Fund, which aims to protect members of defined benefit pension schemes if their scheme becomes insolvent.

However, Thomas Cooks’ pension funds together have a £100 million surplus above the levels needed to secure PPF benefits.

A spokesperson for the trustees said: “Over recent weeks the trustees of the Thomas Cook Pension Plan have been engaged in discussions with the management and other stakeholders of Thomas Cook Group to try to support the recapitalisation of the company.

“The trustees remain focused on protecting the accrued benefits of the members of the Thomas Cook Pension Plan and are in continual dialogue with a number of parties including the Pension Protection Fund and the Pensions Regulator to agree next steps.”

The spokesperson noted the surplus and said the trustees are “hopeful that the PPF lifeboat will, once the assessment period has ended, not be called on and benefits in excess of PPF levels will be provided from outside the PPF”.

Thomas Cook’s UK employees have been urged to contact the Insolvency Service for redundancy and other payments. Although redundancy payments are usually paid by the government within 14 days of a claim being received, the Insolvency Service said “special arrangements” are being put in place to pay staff sooner if possible.

Rebecca Thornley-Gibson from law firm DMH Stallard said employees will be able to claim for pay, statutory redundancy, holiday pay and notice payments. “If these are paid promptly, employees will at least have some time to catch their financial breath as they seek alternative roles elsewhere.”

But according to the British Airline Pilots’ Association, staff do not know whether they will be paid this month. “While detailed plans to repatriate passengers have been carefully put together and ministers have and will continue to claim the credit for that, the staff have been stabbed in the back without a second’s thought,” it said in a statement.

Thomas Cook’s collapse demonstrates the “vulnerability” of firms in the aviation and travel sector, according to travel and tourism expert Dr Neil Robinson from the University of Salford Business School.

He said: “The sector has come under many pressures associated with very slim profit margins for each travel product sold, a possibility of too many players in an already saturated market and one might argue that the product mix on offer at Thomas Cook did not align with what its customers really wanted.

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“Their price, promotion and how people actually booked Thomas Cook holidays did not keep pace with changing technology and demand; for example, they still had a lot of high street outlets, which incur rental and other costs.”

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