Staff from discount retailer JTF are set to take legal action against the company after being made redundant with immediate effect when the company collapsed into administration.
Nottinghamshire-based JTF Mega Discount Warehouse collapsed earlier this month, after a deal for the sale of the business fell through – resulting in the loss of around 500 jobs.
A statement issued on behalf of the company said that the pandemic had played a significant role in its demise, with the forced closure of stores wiping out fireworks and Christmas sales which were ‘two of the largest seasonal items for JTF.’
StokeonTrentLive reports that chairman Arthur Harris – who acquired the business in 2020 – told staff in a letter on Tuesday: “Unfortunately, our collective efforts to secure a sale of the business have failed and we were forced to cease trading on Friday, July 16.
“As we have ceased trading we are no longer able to offer employment. It is with considerable regret therefore that I must inform you of our decision to terminate your employment.”
According to news reports the company is continuing to seek a buyer, but it has issued a notice of intention to appoint an administrator.
Now, a handful of former employees have contacted law firm Simpson Millar, claiming they were notified by email that they had been made redundant with immediate effect – and that those on furlough would not be returning to work as expected.
The law firm says it is now in the early stages of investigations to enable appropriate legal action to be brought to secure what is known as a Protective Award on their behalf.
A Protective Award is a payment awarded by an employment tribunal in cases where an employer fails to follow the correct procedure when making 20 or more redundancies.
Where an employment tribunal finds in the favour of the employees, they will be able to access the funds via the Government Insolvency Service.
Damian Kelly, head of employment law at the firm, said: “The current situation is making it difficult for many companies across most industries and it is no surprise that retail giants – and particularly those that are so reliant on physical footfall – are being significantly impacted by the coronavirus pandemic.
“Sadly in this instance we understand that there had been a buyer for the business, but that the sale will no longer be taking place. As a result, the number of employees who are facing redundancy is really quite significant.”
He added: “While some companies are struggling because of the pandemic, they still have a duty under current employment law legislation to carry out a proper consultation with staff at risk of redundancies. Where that does not happen, employees can bring a claim for a Protective Award.
“While the process to claim for a Protective Award will not result in an influx of cash immediately, legal protection remains in place to support people who are made redundant without being taken through the correct consultation process, and the money recovered in successful claims will provide some longer term security for those affected.”
An online compensation form – which allows other employees to see whether they can claim – is now live on the Simpson Millar website.
Established 40 years ago, JTF has 12 stores and 500 staff across the Midlands and the north of England, including Leeds, Warrington, Preston, Stoke-on-Trent, Tamworth, Hucknall, Lincoln and Newcastle.
In November, BusinessLive reported how the company revealed plans to open 40 new stores, create 1,400 new jobs and float on the stock market.