“Everything must go” – Mothercare’s closing down sale

Mothercare is launching a closing down sale in preparation for closing all of its stores.

Mothercare has announced that administrators have been appointed as a “necessary step in the restructuring and refinancing” of the high street store. The baby goods retailer has struggled for some years to achieve a sufficient level of probability, much of which has been put down to years of underinvestment in online platforms. Part of the emergency rescue plan involves closing all of its UK stores and thoughts turn to the 2,500 employees who are now at risk of losing their jobs.

A company can be put into administration if it is in debt and if it is unable to repay the money it owes. Administration protects the company from legal action be people / organisations who are owed money and once appointed, the administrators will try to repay as much of the debt as possible.

There are a lot of complicated rules around redundancy but some useful points to consider include:

• When a company goes into administration, eligible employees must apply to the government for a redundancy payment, holiday pay and notice pay.
• Employees with less than two years’ service will not be entitled to a redundancy payment.
• If another company takes over the business, the Transfer of Undertakings (Protection of Employment) Regulations 2006 may apply.

If you find yourself in a redundancy situation and need some help, please do not hesitate to contact Richard Lozano, Taylor Bracewell’s Employment Lawyer on 01302 341414.