Members of Old Square Chambers were instructed in IN THE MATTER OF CARLUCCIO’S LIMITED (in administration)  EWHC 886 (Ch), in which judgment was handed down by Snowden J on 13 April (a rare event, given that it was a Bank Holiday). To view the full judgment, click here.
This was the first case to consider the application of the Coronavirus Job Retention Scheme (JRS) under which employers can claim for 80% of employee salary, pension and NI costs (up to £2,500 a month) if those staff are kept on the books doing no work (‘furloughed’) rather than dismissed as redundant. The context was that the Carluccio’s chain of restaurants had gone into Administration on 30 March following their forced closure two weeks earlier because of the pandemic.
Oliver Segal QC and Stuart Brittenden appeared for Unite the Union, instructed by Richard Arthur of Thompsons Solicitors LLP, representing the interests of employees of Carluccio’s.
The hearing was dealt with on an urgent basis, by remote video, to determine the legal framework within which the Administrators might work, given that there was no money to pay staff, but there was an intention to ‘mothball’ the business with a view to selling part or all of the business once the Coronavirus crisis in the UK was over. The pressing issue was to clarify the extent to which the Administrators might apply to furlough employees pursuant to the JRS whilst only ‘adopting’ their contracts after the initial 14 day period to the extent consistent with their overarching duties.
The details of the Scheme which are known to date are contained in on-line guidance from the Government at https://www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme. Under the heading ‘Who can claim?’, the Guidance includes:
“Where a company is being taken under the management of an administrator, the administrator will be able to access the Job Retention Scheme. However, we would expect an administrator would only access the scheme if there is a reasonable likelihood of rehiring the workers. For instance, this could be as a result of an administration and pursuit of a sale of the business.”
The key matters decided by the Court were these:-
The ‘capable, efficient, and helpful’ clerks’ room provides ‘a service-orientated approach and goes above and beyond in trying to ensure you have the right barrister for the job ; you have the utmost confidence in the clerking.”
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