Monarch Airlines goes into Administration: How will this affect employees and holiday-makers?

October 4, 2017

 

What is Administration? – Administration is an insolvency process by which a company is placed under the control of an insolvency practitioner to enable him to achieve certain statutory objectives.

The primary objective of any administration is to rescue the company so that it can continue trading as a going concern. There is currently no realistic offer to acquire the business as a going concern but this cannot be ruled out.

What does Administration mean for employees? – Administration does not mean that the company’s employees are automatically dismissed. Generally speaking, if an administrator employs you for more than two weeks, he adopts your employment rights.

Any “qualifying liabilities” under adopted employment contracts are paid by the administrator in priority to his own fees and expenses, floating charge holders and unsecured creditors. Qualifying liabilities are restricted to “wages and salary”, including holiday pay, sick pay, payments in lieu of holiday and contributions to occupational pension schemes.

Other sums due to employees, including any unpaid wages that accrued before the administration, rank only as an unsecured claim.

If the business is sold, it is possible some or all of the employees’ rights would be automatically transferred across to the purchaser who then becomes liable for them.

What does Administration of Monarch mean for holiday-makers booked to fly with them? – ATOL is a scheme that protects customers who have booked a holiday with most travel companies in the UK. ATOL is backed by the UK Government.

If an ATOL protected travel company ceases trading, the scheme protects customers who have booked holidays with the firm. It ensures that they don’t get stranded abroad or lose their money.

ATOL protection applies to virtually any overseas air holiday booked with a UK travel company.

If customers book parts of their holiday separately, they would need to have booked them within a day of each other to receive ATOL protection.

It is important to point out that ATOL does not apply to holidays or flights booked direct with airlines. In this case it is important to take out suitable insurance cover with specific insolvency cover.

Overseas air holidays booked with UK travel companies must be protected. There are several ways to check including looking out for the ATOL logo on travel company websites, brochures and advertisements. If you’re not sure, customers should ask their travel company or agent, or use the ATOL search on their website.

If you would like more information on this or a related topic, please contact the Insolvency team.

Contact Our Team
Catherine Burke
Partner
View Profile
Damian Phillips
Partner
View Profile
Fflur Jones
Managing Partner
View Profile
Gareth Wedge
Partner
View Profile
Mark Rostron
Partner
View Profile
Nick O’Sullivan
Partner
View Profile
Owen John
Partner
View Profile
Rhodri Lewis
Partner
View Profile
Stephen Thompson
Partner
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee, Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper, ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale, Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth, Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani, Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb, Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel, Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams, Guarding UK Ltd