Closing a venue is painful, and doing it well matters. Staff must be paid what they're owed, including wages, accrued holiday and notice. Where redundancies are involved, eligible employees with enough service are entitled to statutory redundancy pay, and employers proposing many redundancies at one establishment have collective consultation duties. Suppliers and the landlord need clear communication, and the lease terms decide what can be handed back or assigned.
If the business can't pay its debts, the directors should take advice from a licensed insolvency practitioner early, because under the Insolvency Act 1986 continuing to trade when there's no reasonable prospect of avoiding insolvency can create personal liability. Formal routes include administration, a company voluntary arrangement or liquidation, and where the employer is insolvent staff may claim certain amounts from the government's Redundancy Payments Service. Licences, registrations and utilities also need closing down. Most of all, telling the team honestly and early, rather than locking the doors overnight, is the decent thing to do and protects reputations for whatever comes next.
What we ask on the show
- Have you ever turned up for a shift to find the doors locked?
- What's the right way to tell a team the venue is closing?
- When should an owner stop fighting and call it a day?
- What did closing teach you that opening never could?