2,100 of Monarch Airlines Limited and MonarchTravel Group (Monarch Holidays) are affected by the decision to place the company into administration.
What is the effect of the Administration? An Administrator is appointed to rescue a Company and realise its assets. Whilst the legislation requires the Administrator to explore whether they can preserve the insolvent company, in most cases an administration leads to the sale of a company’s assets to a 3rd party buyer.
What is the effect on employees? The appointment of an Administrator does not automatically terminate the contracts of employment of the staff. Employees can expect to be notified by the Administrator of what will happen to them and what their entitlements are. They can expect to be notified within the first 14 days of the insolvency.
What about outstanding wages and other payments? If the employees retain their jobs within the first 2 weeks, they will become preferred creditors ( arrears of salary for up to 4 months prior to insolvency capped at £800 and up to 6 weeks holiday pay), ranking 3rd in priority to secured creditors and costs of the insolvent estate. Anything over and above these payments must be claimed from the National Insurance Fund (“NIF”) if there is insufficient monies available from the sale of the Company’s assets.
Payments from the NIF are capped at £479 per week and consist of up to 8 weeks arrears of pay, 6 weeks arrears of holiday pay, statutory notice pay, statutory redundancy pay and unpaid pension contributions.
What happens if a buyer is found? The rights of the employees who have retained their jobs are transferred to the new company under the Transfer of Undertaking (Protection of Employment) Regulations 2006.”
FOR MORE INFORMATION CONTACT Sarah Turner at Legatus Law
020 787 32279 London
0113 302 1330 Leeds