NEWS

Mothercare office workers unpaid after retailer goes into administration

Published on: 11th November 2019

Industry rallies round to support Mothercare branch and head office staff.

According to a post on the Toy Detectives website, Mothercare UK’s employees were due to be paid on 8th November. However, those that were told they were being made redundant on Wednesday 6th November have not received their pay. Office and retail staff working for Mothercare in the UK are normally paid every four weeks on a Friday, rather than monthly.

This move did not come as a surprise: in a meeting on Wednesday morning, administrators PwC told the head office staff that their contracts had been terminated the day before and they would not be paid on Friday. Administrators suggested those affected should apply to the Redundancy Payment Service (RPS) and make a claim from the National Insurance fund for unpaid wages and notice. However, the administrators then claimed that they will set aside money for when, as they anticipate, RPS rejects any such requests. This leaves staff not knowing when they will receive the money for which they are entitled; it could potentially be weeks or even months before they get what is owed to them.

The meeting was conducted by PwC administrators, although Mark Newton-Jones, CEO of Mothercare plc was also said to be present. According to the report, he did not respond to questions from employees regarding the short-term financial difficulties they will now face.

On Wednesday, the Daily Mail reported that Mothercare’s bosses had received bonuses of over £560,000 just months before the company’s collapse. Mark Newton-Jones got £158,000, raising his total pay to £660,000. Chairman Clive Whiley took £240,000, which gave him £696,000. Chief Financial Officer Glyn Hughes was handed £163,000, leaving him with £528,000.

Store staff are also facing redundancy, however, those that will remain employed for the short term have been paid; administrators will need store staff to carry-out the closing down sales that will attempt recovery some of the money owed to creditors.

Closing down sales began in all 79 stores last Friday, with most initial discounts offering 10-20 % off. Deeper discounts will be applied as the closing down sale progresses. Consultancy firm Gordon Brother are overseeing the sale, which will also include the selling-off of shop fittings and furniture.

This development stands in marked contrast to an overwhelmingly sympathetic response from the toy and nursery industries: fellow retailers including The Entertainer and Halfords have encouraged store staff to apply for vacant roles, while many suppliers have posted supportive messages on LinkedIn and other social media channels, thanking Mothercare employees for their support and suggesting they would make great assets for other businesses.

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