Closure leaves staff unpaid by up to £800 for over three weeks
West End restaurant Boom Pizza has been accused of failing to pay its staff, with some workers allegedly being owed for over 160 hours of work. Owner of Boom Pizza, Kenneth Scott claims that Tony Crolla, who reportedly owns 85% of the landlord company Avatar Foil Ltd, applied “pressure” in “an ever-increasing number of attempts to shut the business down.”
As of 21 March, the payment of their wages is reportedly 25 days overdue. The business closed on Monday 6 March and went into liquidation, according to former staff. However, at the time of publication Boom Pizza’s trading company Buckle Up Ltd has not yet filed to liquidate with the Accountant in Bankruptcy (AiB).
Former Assistant Manager of Boom Pizza, Chloe Galbraith, told The Glasgow Guardian: “All staff got an email on Monday morning. I was on my way into work when I received mine, telling us that it was closed and would not be opening again.
“No one has yet been paid for any hours we have worked.”
Former supervisor at Boom Pizza, Neil Griffiths stated: “Effectively all staff I know were made redundant on Monday [6 March] and have not been paid. I’m owed £800 and I know people who are owed more. It’s a bad situation.”
Griffiths continued: “We’ve been told by the company that our pay will now be handled by a liquidation firm, with no set date for when we’ll be paid. None of us has received any details on how to contact this supposed liquidator.”
Members of staff have tried to contact Scott through their work emails, however Galbraith alleges that their email accounts have now been locked and that she has been unable to reach him by telephone.
Boom Pizza was formerly the venue for La Favorita. After the allegations of Boom Pizza staff not being paid surfaced on Facebook, La Favorita posted on its page to clarify that it is “in no way connected to Boom Pizza in Glasgow.”
The email revealing the closure of the restaurant to staff on Monday 6 March is from the Financial Controller of Boom Pizza, Gordon Frew. It reads: “In recent weeks our business has been placed under immense pressure principally from our immediate Landlord, AVATAR FOIL LTD [sic], a company controlled by Tony Crolla who remains the majority shareholder in the existing La Favorita Delivered PIZZA business.
“It is clear that such pressure has been applied, in such a way that Mr Crolla wanted Boom to close down.
“We have endeavoured through strenuous efforts in difficult circumstances to keep our main investor onside with the Glasgow operation.
“Unfortunately, the latest demand last week from our landlord has rendered his position untenable and he informed us yesterday, 5th March 2017, that he is no longer willing to sustain the Glasgow business through any further investment.”
The Boom Pizza website has been updated with a statement, reading: “It is with the utmost regret that Boom Pizza has had to call time on the Glasgow outlet due to an ever-increasing number of attempts to shut the business down.”
Commenting on the closure, a spokesman for Boom Pizza said: “These attempts culminated in Boom Pizza receiving a demand from Tony Crolla, the self-styled Chairman of the Edinburgh-based Vittoria Group, via his financial controller Andrew Gibson, to remove all internal and external Boom Pizza signage or he would irritate the lease which would allow him to terminate the lease and repossess the premises.”
They continued: “To pile on more unwarranted additional pressure Mr Crolla has attempted to force Boom Pizza! [sic] to make payment of the rent 10 days earlier than it was agreed as being due.
“The effect of this unwelcome pressure is that our current funder is not prepared to invest any further funds in the Glasgow outlet. This has meant closure of our Glasgow outlet with the loss of over 20 valuable jobs, a blow to our expansion plan and the unnecessary expense of having to consult lawyers and insolvency practitioners.
“Boom believes that this unnecessary course of action by Mr Crolla is directly linked to ongoing court actions surrounding the split of La Favorita Delivered business in March 2016. Only recently Mr Crolla’s lawyer advised that he ‘had instructions to bankrupt the Pursuer. Boom Pizza’s current funders are happy to continue to invest in the Boom Brand in outlets where Mr Tony Crolla is not involved.”
A spokesman for The Vittoria Group responded to these allegations, stating: “Kenneth Scott has repeatedly breached the very clear terms of his lease agreement at Gibson Street and has also failed to pay his rent.
“It is disappointing, although not surprising, that he continues to attempt to deflect the blame for his own business failings onto others.
“There are other, ongoing legal actions being taken against Mr. Scott and we are extremely confident these will be concluded successfully in our favour.”
Galbraith commented on the effect of the closure, saying: “Me and all the staff worked over 50 hours and got them out of [the] debt that was left over from the old team. The manager Marek was amazing – he got a whole new team [and] we were like a family. He got the place from in debt to making £10k a week in one month. He put his own money into the business. When we didn’t get paid, he gave the staff money out of his own pocket so we could pay [our] bills.
“Myself, Marek, chefs, drivers and some front of house [staff] have worked for Kenny for years when it was La Favorita. He totally betrayed our trust. I was heart broken – all our hard work had gone to nothing [and] he didn’t warn us in any way.”
Workers’ rights group Better Than Zero commented: “Regardless of whether it was the result of liquidation or not, the owners of Boom pizza have acted disgracefully by refusing to pay their staff what they are owed. Those who have worked there for 2 years or more are entitled to statutory redundancy and should contact the HMRC Redundancy Line on 0330 331 0020. For everyone else we would urge them to lodge a claim for unpaid wages from the National Insurance Fund on 03000 560 630.”
The members of staff have now contacted Advisory, Conciliation and Arbitration Service (ACAS).
It has further been revealed that Scott is in the process of opening a new Boom Pizza restaurant in Dalkeith in Midlothian, with an anonymous source has alleged that the signs on the Dalkeith storefront have been up since January.
The venue was formerly the residence of the County Hotel, co-directed by Charles McKinlay, who is now the newly appointed director of Boom Pizza’s trading company Buckle Up Limited, formerly directed by Kenneth Scott. Scott resigned the day after McKinlay was appointed.
The anonymous sourced continues to accuse Scott of leaving four other people in debt, alongside the unpaid staff members, alleging that this is the third time Scott has left “large debts” after having “left/liquidated [a] store.”
The Glasgow Guardian contacted Scott who has responded to these further allegations, stating:
“I have checked with the Boom Accountant. No members of staff are due any outstanding expenses other than their wages, this will be reflected in the statement of liabilities which will be supplied to [the] liquidator by our accountant.
“The liquidator is awaiting reference numbers from the government insurance scheme the reference numbers allow employees to lodge their claims and be paid.
“It is not possible to obtain reference numbers unless a liquidator has been appointed.
“All staff members have been notified via our accountant.”
He further added that “I have just been advised by the liquidator that they now have the reference number which will be supplied via email to all staff later today or tomorrow am this will allow all staff to process their payments.”
Boom Pizza’s website has been further updated in response to The Glasgow Guardian’s previous article. Galbraith claims she has yet to receive a reference number or be contacted by Scott or the liquidator to be informed of this development.