The demise of Clinton, was it on the cards?
May saw the demise of Clinton Cards, a company that opened its first store in 1968 and which, after a number of struggling months, finally succumbed to the tough trading conditions. It is sad to see yet another of our high street stores fall into administration.
The loss of this company adds around 8,000 employees who are now left without employment to the national unemployment figures. This is the largest retailer to go into administration, in terms of job losses, since Woolworths in 2008.
Clinton Cards puts its difficulties down to a change in consumer focus – instead of buying greetings cards we are now favouring online messages or bespoke cards created by companies such as Moonpig. This has had a major impact on the company, which struggled to keep its market share.
So what does this mean for those employees who are left without an employer?
If the administrator who has been appointed to deal with Clinton Cards is able to find a buyer then those existing employees are likely to transfer to the new company under TUPE (Transfer of Undertakings and Protection of Employment). This means that the employee’s employment terms, contractual rights and length of service would be protected under the legislation. This would be the best situation for all involved; securing jobs and keeping unemployment to a minimum.
But if a buyer cannot be found then the employees of Clinton Cards will find themselves in a redundancy situation. In legal terms there is a cessation of business which would result in the administrator making them redundant.
In situations where administrators are called into companies there are often many unpaid debts, wages being one of them! Employees can look to claim any unpaid wages from the administrator but they may well be at the end of a long line of people looking to be paid what they are due. If the administrator can’t raise enough funds from the sale of the company and any of its assets then employees are unlikely to see any of the money that is owed to them, let alone any redundancy pay that they may be due. If the administrator is unable to meet the monies that are owed to employees then individuals can make a claim to the National Insurance Fund. The fund can look to make payments for any outstanding wages due, statutory redundancy pay, statutory notice and holiday pay that is owed.
It is tough for employees in this situation and there is little that they can do sometimes, other than sit tight and hope for a new buyer to save them from the ever growing number of people who are made redundant.