Carluccio’s given more time to furlough staff

Carluccio’s, which last month collapsed into administration, has been granted more time so that its employees can be furloughed.

This week, a high court judge extended the time limit for the administrators to act after the “overwhelming majority” of the company’s 2,000-plus employees agreed to be furloughed, whereby 80 per cent of their salary will be paid up to the value of £2,500 through the Government’s Coronavirus Job Retention Scheme (CJRS).

Around 77 employees were understood to have no yet consented to any terms.

The financial firm FRP Advisory together with the union Unite both required clarity as to the Insolvency Act, which requires administrators to dismiss employees within 14 days of being appointed, or accept contractual liability as regards said workers.

Under the guidelines, the 77 employees who didn’t consent would have seen their contracts terminated, but Mr Justice Snowden issued a ruling that said it would be in the interests of both Carluccio’s and its staff that the 14-day period should be extended to give more time to those who hadn’t yet agreed.

The judge also confirmed that, in his view, the administrators were eligible to access the scheme on behalf of the company’s employees.

The details of the CJRS published to date said: “We would expect an administrator would only access the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business.”

Mr Justice Snowden said: “I have evidence from the administrators that there have been several expressions of interest in respect of some or all of the company’s business, and that accordingly they take the view that there is a reasonable likelihood of achieving a sale of the business.

“In that event, the relevant employees would be transferred to the buyer and, after the restrictions on restaurants are lifted when the Covid-19 pandemic eases, they will be able to resume work in the business.

“The administrators think, and I agree, that this is what is meant by the expression “rehired” in the scheme guidance. As such, the administrators believe, and I accept, that in principle, the scheme ought to be available to the company in respect of furloughed employees.”

Howard Beckett, Unite’s assistant general secretary for political and legal affairs, said: “Time was running out for some of our members in Carluccio’s. They faced the prospect of being dumped out of work this weekend.

“In taking this action, Unite has secured them some wage security. It is now essential that all those Carluccio’s workers who have either not received a letter or not responded to the letter from the administrator get in touch with their union, Unite, or the administrator immediately to ensure they are not dismissed and lose out on the opportunity that this court judgement has ensured.”

He added: “This important decision ensures that no one is left behind in a hospitality sector reeling from the effects of the shutdown.”

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