Administrators called in at Corby's Orchard House Foods as unpaid staff say they've had to resort to using foodbanks

One of Corby’s biggest employers is set to be plunged into administration following weeks of turmoil.

The owners of Orchard House Foods, which employs around 500 people in Corby, last night formally announced that they had begun the legal process of appointing administrators amid ‘extremely challenging conditions’.

It comes as workers at the firm’s Gateshead plant are owed thousands in redundancy payments that were promised to them at the beginning of December, leaving them having to use foodbanks and get crisis loans.

Orchard House, headquartered in Manton Road, Corby, is one of the town’s longest-established firms and supplies big companies including M&S with food products. It was one of a number of manufacturers that offered hope to locals when it opened in 1985 in the wake of the steelworks closure.

But last month it shut its sister factory in Gateshead. Staff had been promised redundancy and other payments on December 9, but that date came and went without workers getting what was owed to them, leading to many of them having no funds to pay for Christmas. They still haven’t been paid and their redundancy will now be arranged by the insolvency service.

Staff at Corby contacted our reporters earlier this week to raise their own concerns about the goings-on there. Former Gateshead workers also contacted the Northants Telegraph to raise the alarm and to warn staff in Corby what might be about to happen to them.

So what’s happened?

In August last year, Orchard House announced it was closing its loss-making factory in Gateshead and consolidating its operations to Corby.

About 430 jobs in the North East were placed at risk. The company said it would reopen its mothballed third factory in Manton Road, Corby, and create 100 new jobs here to add to the 500 already employed.

In December, with less than 24-hours’ warning, the company failed to pay its Gateshead staff their promised redundancy packages and wages for accrued holiday. This left some of them seeking help from foodbanks and with no cash to pay for presents over Christmas.

MP Liz Twist raised the issue in the House of Commons.

Earlier this week a notice appeared on the government’s Companies House website that said, as of January 10, the firm’s parent company – Orchard House Holdings Limited – was in the process of a compulsory strike off. This happens when Companies House either deem the firm to be no longer trading or when it has failed to conform to legal requirements.

The firm told this newspaper on Friday that the notice was an ‘administrative issue’ that had already been rectified with Companies House.

Then, at the weekend, staff at two of the Corby factories were told not to come into work. Bosses told them work had temporarily halted because of a ‘supply issue’.

What are workers saying?

The factory at Gateshead is now closed and and in the final stages of being mothballed. Some workers from Gateshead who came to Corby to help transfer operations have also not been paid.

Several people connected to the Corby factory have contacted our reporters. One single-parent has publicly posted details of her experience online.

She spoke of how she was due two days’ salary and eight days’ holiday pay on December 23, but only received pay for two days.

She said: “I was due thousands in redundancy on January 6.

"I have received nothing. I have no universal credit payment until January 30.

"I have kids to feed, electricity and gas to pay along with all my other rent and bills.

"I have had to receive a crisis payment and had to use a food bank to survive this month.”

What have Orchard House Foods said?

A spokesperson for Orchard House Foods said last night: “Today, we have announced the start of a legal process to appoint an administrator. We have had to take this action given the extremely challenging economic and trading conditions that have badly hit Orchard House Foods. The economic conditions have meant increased input prices and overheads, and this has significantly increased pressure on our cash position. As a result, the Directors have taken the difficult decision to file with the Courts a notice of intention to appoint an administrator.

“For our colleagues at our site in Corby, once appointed, the administrator will step in to run the business, repay our creditors and review strategic options for the business. For our former employees at Gateshead, once an administrator is appointed, they will be able to claim any outstanding monies owed, including the delayed redundancy payments, via The Insolvency Service. We expect this to happen as soon as the administrator has been appointed and we will be providing them with additional support to help with their claims.”

What did MP Liz Twist say in the House of Commons?

The Labour MP for Blaydon has been trying to help her constituents to get the money that is owed to them. On December 15 she asked the Leader of the House to ask the Government to make a statement on the plight of the workers.

Speaking the Commons, she said: “Can we spare a thought for my constituents who have been well and truly scrooged by their former employer? In the summer Orchard House Foods announced the closure of the site in my constituency with the loss of 430 jobs.

"Many of those staff were expecting their redundancy and final payments on December 9 but the night before they received an email telling them that that wouldn’t be happening.

What’s the history of Orchard House in Corby?

In 1981, with unemployment running at a staggering 30 per cent, Corby was named as an enterprise zone. Businesses moving into the zone were exempt from business rates, could reclaim some of their building costs and received tax relief on imported goods. There was also a near complete relaxation of planning controls in the zone, meaning that warehouses and factories could be built without specific planning permission.

So it was in this climate that, in 1985, Orchard House Foods opened its doors. It now employs more than 500 people – with more joining the workforce during peak times.

It makes drinks, jellies, yoghurts, compotes and granolas for major retailers, supermarkets and restaurants at its Earlstrees Industrial Estate base.

It was the first UK company to produce freshly-squeezed orange juice for sale to the public.

The town is already the UK centre for food manufacturing and has a number of fruit preparation firms.