Thomas Cook : the end of the journey

28 November 2019
Jacques PEROTTO and Arielle DUCHENE

On November 28th, 2019 the Commercial Court of Nanterre, France, selected the offer of 11 travel compagnies to buy-off 149 Thomas Cook agencies (out of a total of 174 in France). One employee out of two will be saved; it is now time for the bankrupt Group to manage the suppression of 338 positions in France and consult its staff representatives.

 

Thomas Cook employs 685 people in France with a €750K turnover.

On the September 23rd 2019, Thomas Cook announced it was entering a compulsory liquidation process in France ; no global offer was made and so far only 149 Thomas Cook and Aquatur Agencies have been taken over by 11 different travel Groups and compagnies (such as Havas Voyages, Karavel-Promovacances etc).

Thomas Cook will be dismantled and only 347 positions will eventually be safeguarded.

The Central Works Council will soon be consulted on the social plan and the projected redundancies.

Indeed, according to the French Labor Code, an information/consultation procedure with the Works Council (“CSE”) or the Central Works Council (“CCSE”) needs to be implemented; two official meetings should be organized by the Employer with three objectives in order to:

- Reduce the effects of the downsizing reorganisation on the employees

- Reduce the number of people supposed to be made redundant

- Find re-employment solutions for all employees affected by job cuts

A specific document drafted by the employer or negotiated with the unions must be sent to the French Labor Authorities for approval.

However, in the case of compulsory liquidation, the constraints on the employer are considerably reduced as there’s only one “CSE” (or “CCSE”) meeting and the social and financial measures implemented by the employer need to be mitigated. The approval, supposed to be given by the French Labor Authorities, is by consequence easier to obtain.

Moreover, the French Labor Regulations provide that the compulsory liquidation is, in itself, a fair ground for lay-offs ; meaning that the Employer is not obliged to justify his decision with economic and financial explanations. By consequence, the dismissal decision taken by the employer is rarely challenged in Court, unless it is a case of manifest fraud ; this would be the case if, for example, the parent company took over all the assets from its subsidiary for its own benefit.

Finally, in the event of non-compliance of the mandatory information/consultation procedure with the Works Council “CSE” or “CCSE”, the Company would be sentenced to pay a €3,750 fine.

In the case of Thomas Cook however, it is already planned to consult the staff representatives of the Group on a social plan and potential redundancies of the employees that were not concerned by the buy-back offers.

Despite Thomas Cook’s bankruptcy, the employees that will be made redundant will not entirely be left by the wayside since they will benefit from the “AGS” insurance which, in France, guarantees the payment of salaries in case of liquidation.

 

Jacques Perotto, partner, and Arielle Duchene, associate, in Alerion’s Employment department