A bid by former employees of failed travel agency Vacation World to claim unpaid salaries and redundancy pay has been turned down.
The 14-strong agency chain, owned by Stuart Arnott and a member of the Hays Independence Group, ceased trading in May after failing to find a buyer. A total of 55 staff were made redundant, although up to 20 found jobs within Hays Travel.
Employees have received a letter from the government's Insolvency Service, part of the Department of Business, Innovation and Skills (BIS), indicating that they are not entitled to arrears pay or redundancy pay. They had been advised by Vacation World to apply to the Insolvency Service for their outstanding pay.
In the case of arrears payments, the letter said: "You are not entitled to this payment because we believe your employer is not insolvent ...You may wish to consider applying to a court for an order making your employer formally insolvent.
"If you know of any other employees, or creditors of the employer, you may wish to make a joint application, which will help spread the cost."
The letter added that redundancy payments can only be made from the National Insurance Fund if the employer has refused or been unable to make the payment himself. "As these requirements have not yet been met in your case, in order to obtain payment you should apply to an employment tribunal.."
The agents have been advised to lodge a claim with BIS after Arnott admitted he would be unable to pay their outstanding wages and redundancy payments.
In a letter from Arnott to all staff notifying them of his decision to close the business in May, he said: "It is unlikely that the company will be able to pay your salary from the period from May, in which case you should make a claim for this unpaid salary to BIS."
An Abta spokesman said: "There is evidence on Companies' House that this company has applied for a voluntary arrangement which is a clear indication of insolvency. Our advice to former staff would be to go back to BIS and query this decision."
Stuart Arnott could not be contacted for a response.
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