Individual voluntary arrangements (IVAs) may help employees who become redundant as their firms run into trouble in the ongoing weak economic climate,…
Individual voluntary arrangements (IVAs) may help employees who become redundant as their firms run into trouble in the ongoing weak economic climate, something many Habitat staff could face.
Three of the troubled retailer’s London stores – at Tottenham Court Road, King’s Road and Finchley Road – have been bought up by Home Retail, the parent company of rivals Argos and Homebase.
However, as well as Home Retail declining to purchase the Westfield Shopping centre outlet, it has also decided against buying Habitat stores outside the capital and these have now gone into administration.
For the employees, this means 100 London store jobs are safe, along with 50 back office and design positions, but the future is uncertain for the 750 workers based elsewhere in the UK.
If some or all of these people lose their jobs, the result could be that many of them who have debts are left unable to pay back what they owe, either because of unemployment or their next jobs being part-time or paying less.
People unable to pay debts may seek an IVA because, although it is a form of insolvency, it enables debt to be cut by freezing interest and agreeing a reduce level of repayments, which must be kept up for a period of up to five years after which anything left is written off.
If Habitat workers do lose their jobs, this may add to the number of jobseeker’s allowance claimants.
Although the headline unemployed total fell by 88,000 to 2.43 million in the three months to April, the tally of people claiming benefit rose by 19,600 in May to 1.49 million.
By Joe White