David Urquhart Travel have announced that they will be winding up their coach tour and hotel operations due to the current uncertainty of when operations will return to normal after the coronavirus outbreak. The company advised that all operations will be stopped in an orderly manner over the coming months.
The company had lodged an application with the Court of Session on 4th May 2020 to enter a Company Voluntary Arrangement (CVA). This included applications for David Urquhart (Travel) Limited, David Urquhart Transport Limited, and Hart Hotels Limited.
Two representatives from Johnston Carmichael (Chartered Accountants and Business Advisers) have been appointed as joint nominees for the proposed company CVA, which purpose is to allow the business owners to seek protection from the creditors to allow time to implement plans to turn the business around, or help to maximise returns to creditors.
This raises several questions for consumers who have bookings with the company, as well as for the 110 staff that are set to be made redundant.
Information for consumers impacted by the announcement
What does this mean for customers with bookings with David Urquhart Travel?
The company have provided the reassuring information to customers that deposits held, and balances paid for travel have been held in a secure, independent Trustee Account, which is managed by a separate professional Trustee Management Legal Company. David Urquhart Travel have advised that all customer funds are entirely safe.
What does this mean for customers of Hart Hotels Limited?
Customers of Hart Hotels who have made advanced payments for hotel bookings will be added to the creditors’ list. Johnston Carmichael have advised that the sale of the Hart Hotels is expected to generate sufficient funds to repay creditors (including customers with bookings) in full. However, this may take some time.
Customers who have made a booking that was for more than £100 on a credit card, can contact the card provider as they may be able request a refund through Section 75 of the Consumer Credit Act. This makes the card provider jointly responsible for these purchases.
Those who paid under £100, or using a debit card, can contact their bank to enquire if it is possible to request a refund under their ‘chargeback’ scheme.
In lieu of neither of these options being applicable, the customer would become a creditor or Hart Hotels Limited.
How can customers obtain refunds for bookings with David Urquhart Travel?
The company will be initially contacting consumers whose travel was cancelled from March 2020 and working through the remaining customers who have bookings with them going forward in sequential date order. The company should contact you directly and arrange the refund.
I have travel booked with David Urquhart Sky Travel Ltd. What does this mean for me?
The decision to wind up the tours and hotel aspect of the business does not affect David Urquhart Sky Travel Ltd, which provides foreign travel cruises, city breaks etc and will continue to operate as normal.
Information for employees that are impacted
I am an employee of the affected companies, but have not heard anything what should I do?
You should try and speak directly to your line manager or HR department. The company should consult with you on redundancy.
The company have announced that they will be keeping a small number of staff for maintenance and security of the properties, and to facilitate viewings of the hotels during the sales process.
How does redundancy work? What are my rights?
Employees with over 2 years continuous service before being made redundant have redundancy rights. During the coronavirus pandemic, these employees still have the same redundancy rights.
In a situation where a company enters administration, any employees who are owed any monies by the insolvent company would become creditors of the company and must apply for any money due as a result to the administrators.
With the application for the Company Voluntary Arrangement in place, Johnstone Carmichael have advised that creditors should be paid in full as the sale of Hart Hotels is expected to raise sufficient funds to do so.
Redundancy pay depends upon the individuals age and how long they have worked for the employer.
The pay amount is worked out based on the earnings before tax (gross pay), the years that an employee has worked for an employer, and their age.
Those aged under 22 – One week’s pay for each full year worked
Those aged 22 to 41 – One week’s pay for each full year worked after age 22 and half a week’s pay for each full year worked prior to this.
Those aged 41 or over – One and a half week’s pay for each full year worked after the age of 41, one week’s pay for each full year worked when aged between 22 and 41 and a half week’s pay for each year worked before age 22.
The employer must advise the employee in writing how the pay amount has been worked out, including when you will be paid (no later that the final pay date unless agreed in writing) and how you will be paid (in monthly pay or separate payments).
Up to £30,000 of redundancy pay is tax free. Redundancy pay is limited for up to 20 years of work.
Employees affected by redundancy must be consulted by their employer. This is usually face-to-face but can be done by other means, including over the phone. With coronavirus restrictions in place, this may be done by other means where agreed.
The redundancy consultation is the employee’s chance to raise any concerns or issues they have with the process being implemented. In this instance, there are ‘collective redundancies’ which have set rules. Companies must consult any recognised trade union or elected employee representatives when redundancies of more that 20 employees are undertaken.
The employer also has the responsibility to notify the Redundancy Payment Service (RPS) when making collective redundancies.
For more information, which is updated regularly on rights in relation to COVID-19 and the coronavirus, you can visit our dedicated website at: www.coronavirusadvice.scot
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