The blame in Spain Thomas With the shock collapse of British tourism giant Thomas Cook, fingers Thomas Cook, the 178-year-old
British institution, collapsed on
23 September
Thomas Cook goes
23 September, plunging 21,000 jobs
worldwide and 9,000 in the UK into
jeopardy and leaving 150,000 UK
travellers stranded overseas.
Right up to the 11th hour it was
hoped that a rescue deal was on the
Reports emerged that even in the
liquidation. It seems recruitment
was also still in full swing.
Jake Atkins joined Thomas Cook
as a user experience designer in
March this year. Atkins tells HR
magazine that the message from the
company when he came on board
was that, while the tour operator
business was “struggling”, the airline
“didn’t have much cause to worry
because it was profitable”.
“There was no real indicator
that the company was in dire
straits,” he recalls.
Atkins says his teammates were
also new; like him they were
recruited to build a new user
experience team. “They were still
hiring up to the Friday before it
collapsed. Everything was rosy on
Friday – with some rumblings – and
then by Monday we had no jobs,”
he says.
Like thousands of others, Atkins
says he wasn’t paid for September
and had to apply for statutory pay
through The Insolvency Service and
for Jobseeker’s Allowance – his first
payment was just £10.45.
“I think everyone thought it
would be saved,” he says. “Which
makes you lose a bit of faith in what
they were doing at the top.”
Scrutiny inevitably soon turned
to senior leaders and whether they’d
run the business in the best way.
Around 1,000 unionised and 100
non-union former employees are
pursuing legal action against the
firm under the Protective Award.
Aneil Balgobin, head of
employment law at Simpson Millar,
the law firm leading the action,
explains that employees are entitled
to compensation if they are made
redundant from a workplace of
more than 20 staff without a
consultation period.
“Thomas Cook employees
basically rocked up to work and
were told to pack their stuff,” he
says. “There was a growing concern
with Thomas Cook, so a month or
so before it should have put people’s
jobs at risk.”
Even if a rescue deal had
materialised Balgobin says there
“would have had to be cutbacks”.
Not all jobs could have been saved
and senior leaders would have been
all too aware of this, he says.
Bosses are also facing pointed
questions over corporate
governance, accounting and
executive remuneration practices.
On 15 October Thomas Cook’s
CEO Peter Fankhauser was the first
former boss to face a grilling from a
cross-party committee of MPs over
the firm’s collapse and a bonus
payment of £500,000, amid calls to
repay it. Fankhauser insisted the
reasons for the collapse were not
“one-sided”, that he did not receive
a 2018 bonus, and that a third of his
2017 £750,000 bonus was in shares
that are now worthless.
Roger Barker, head of corporate
governance at the Institute of
Directors, says that “superficially
Fankhauser doesn’t seem to have
been overpaid relative to other
similar-sized companies”. But it’s
important to scrutinise “not just the
amount but the structure and the
incentives it was creating,” he says.
So does this mean that Thomas
Cook became the latest victim of
poor corporate governance?
News and analysis Thomas Cook liquidation
Cook collapse:
Key dates
28 August
Thomas Cook reveals terms of a £900 million
rescue package that would give Chinese
rm Fosun control of its package tour division
into compulsory
liquidation after
rescue talks fail,
leaving 150,000 UK
travellers stranded
and putting 21,000
in the UK) at risk
and a stake in its
airline business
jobs worldwide (9,000
27 September
Ex-employees begin legal
action against the rm
under the Protective Award
10 HR November 2019 hrmagazine.co.uk
Photography: World Travel & Tourism Council
9 October
all 555 Thomas
Cook retail stores in
the UK. It is hoped
around 2,500 jobs
could be saved
cards. But after failing to secure
funds from banks its directors
finally threw in the towel.
days running up to the collapse staff
were told it was ‘business as usual’,
only to find out through social
media or breaking news that the
firm had gone into compulsory
2 October
Workers protest outside
parliament demanding
answers around the
company’s collapse
and that directors pay
back their bonuses
7 October
The nal holidaymakers to be repatriated
touch down in Manchester, bringing
Operation Matterhorn to an end
15 October
An inquiry into Thomas Cook’s
collapse begins, with CEO Peter
Fankhauser the rst called to
answer questions, followed by
Harriet Green and Manny
Fontenla-Novoa
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