Thomas Cook, what happens to the employees?

This morning, we are waking up to the sad news that Thomas Cook has entered compulsory liquidation and has ceased to trade, leaving 21,000 employees without their jobs.

The collapse of Thomas Cook to most is surprising, but after several consistent profit warnings over the past few years, and having experienced the process myself, to me, it only seemed like a matter of time.

One thing to point out from this, is that it is really concerning that a company of their stature can be allowed to collapse due to such poor financial mismanagement. There should be much stricter and closer regulations of directors of large companies to prevent this very scenario from happening, after all the people who suffer the most from this are the employees serving in the shops, those at head office, the pilots, air stewards, check in staff and not to mention the thousands of people who supported the group, the hotel employees.

As the company had entered compulsory liquidation (where it ceases all operations) they have skipped the administration process within which they’d potentially have one last shot at survival, but sadly for the employees a fairytale ending is not to be.

Following this news, I thought it would be appropriate to share my experiences from when I worked at Entertainment UK, part of the Woolworths group which collapsed in 2008, and the role of HR when a company hits the financial buffers.

When the announcement was made on 26th November 2008, it’ll be a moment in my early career that I will never forget and I quickly learned that business can be unbelievably harsh therefore I must toughen up to support the needs of the employees and secondly, I have never seen such a variation of reactions in one room before, it’ll be an image that will stay with me. Poor business decisions alongside difficult trading and an ever increasing pension deficit all contributed to Woolworths demise and now it seems history is repeating itself with the employees suffering the most.

So what can HR do when a company has hit the buffers? Unexpectedly, employee reactions are amazingly mixed; some are not surprised, others are shocked, some are relieved, others want to do everything they can to save the company, but the majority are distressed and concerned for the future.

When you work in a business where it has a substantial heritage, you often have an incredibly loyal workforce which has a community feel to it so it is vital that HR provide support as much as possible and handles the situation with great sensitivity.

Support each employee as an individual case and listen to their concerns.

HR is almost completely helpless once the administrators arrive on site, yet it is a very busy time for them. Simple requests such as holiday entitlements and resignations have to be run past the administrators first which can take a long time to obtain a response. All standing contracts and assets are frozen which can include employee assistance programmes (unless the full fees are paid for upfront) so HR has to take on the role of handling the situation to the best of their ability and trust me, it is incredibly difficult.

Speaking to the employees is vital, as a HR administrator I went to pick and pack in the warehouse to get orders out just in time for Christmas. Surprisingly it was a jovial time as it looked like Woolworths might actually survive. It was great to see the stock moving again but it had been an incredibly slow two weeks to get to that point and I just couldn’t sit in the office anymore!

We were advised on 12th December 2008 that the iconic doors were closing with final trading taking place on 6th January 2009. From 12th December the HR team had 5000 employees queuing up for advice on their redundancy pay, shares and pensions. I remember going home that evening and feeling completely numb and being able to memorise RP1 forms in my head!

The amount of tearful thank you’s we received as a team in such difficult conditions made us really appreciate that we had the opportunity to work with some wonderful people and that by actively listening and being supportive has impact on employees.

I decided to contact as many recruitment agencies as possible in the hope that we could find suitable employment for as many employees as possible. We held CV workshops, interview skills training (some had been with the company for 40 plus years so this was their primary area of concern) and invited the recruitment agencies in to register candidates. Obviously this shouldn’t be done until further information from the administrators are announced and confirmation of the future of the business is received.

My thoughts are with all of the employees of the Thomas Cook Group, I know today will not be easy for you, and I wish I could bring you some form of comfort, but as my former colleagues and I often say – there’s life after Woolworths, it’s just hard to imagine life without it.

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