Company gone into liquidation & month's wages owed!

mwa · 28 July 2008 at 11:13AM

I think I probably know the answer to this already but would like to check with you knowledgeable MSE’rs!

My younger sister went into work on Thursday and they were all told that the company had gone into liquidation and were sent home with immediate effect with a letter explaining this. She was due a month’s wages this week and obviously won’t get anything. She has an appointment with the Job Centre tomorrow to sign-on but I just wondered if anyone knew whether there was anything she could do about her month’s wages due? I am assuming that creditors are paid off first and staff last but just wanted to check.

Many thanks
MWA

londondulwich · 28 July 2008 at 11:49AM

When a company goes into liquidation there is a hierarchy as to who gets paid first. Employees are right at the top. So do not assume she will go short. She may have to go to tribunal in order to secure the wages.

Unpaid notice, redundancy pay and holiday pay will be due, if she was working there long enough. The failure to consult also gives rise to a protective award this can be as much as 90 days pay. Any payment she does recieve from her employer must be itemised so that the employee can check it's accuracy.

The first thing she must do is write to her employers and set out her grievance. If she does not know their address, she can send the letter to the last known address.

If the employer was a partnership or firm, the director's are personally liable (can use home address, do a electoral search under their names). If the employer was a company the claim will be limited to the company's assets (do a companies house search under the company's name).

She then must wait 28 days before she can apply to a tribunal.

Alternatively, the government has a compensatory scheme operated by the Redundancy Payment Office.

epsilondraconis · 28 July 2008 at 12:06PM

Agree with LondonDulwich.

The employees salaries / holiday are right at the top of the creditors list and so will be paid first, assuming the liquidators find some money available (this may be through the sale of company assets).

The limited company I worked for went into liquidation 3 years ago, we received our salaries, expenses and pro-rata holiday pay outstanding. There was an issue with our pension money being paid in the last month, however after a bit of a fight we received it in the end. As I had been working for the organisation for a number of years, I also received redundancy money from the government. I believe the maximum that could be received was £260 for each year worked for the company. I'd been working for them for approx 10 years and so was just over a month's wage (which didn't go particularly far).

Ensure your sister identifies everything that she believes is owed to here and include in the letter. Also get her to find out which liquidators are dealing with the company - they are usually very helpful when you contact them and so she shouldn't feel on her own.

Good luck - I hope she finds work soon.

McKneff · 28 July 2008 at 1:55PM

i am just a lurker but its so nice that you two took the time to answer MWA
I bet her sister feels much better now.

mwa · 28 July 2008 at 2:10PM

Yes thankyou so much for the info - incidentally having spoken to my sister they actually made them all redundant the DAY BEFORE payday - unbelievable as they must have known this was coming for some time.

I am helping my sister to draft her claim, have checked with Companies House and they are a registered Ltd company (though they've not yet informed CH of the liquidation and I believe they have 14 days in which to do so)

My sister was given a letter terminating her employment along with a leaflet and claim form for the Redundancy Payment Office.

I am gutted for her as she has learning difficulties and this was her first job (she's 24) and it really boosted her confidence, dear of her.

Thanks again for the advice.

MWA

epsilondraconis · 28 July 2008 at 4:15PM

mwa wrote: »

...
I am gutted for her as she has learning difficulties and this was her first job (she's 24) and it really boosted her confidence, dear of her.
...

I remember the day I was made redundant - it was a lovely warm day and a few of us were chatting out the front of the building. The liquidation had been on the cards for a while and so wasn't a complete surprise when it came. I wasn't too concerned when it actually happened; however once the sunny day was over, I began wondering what I would do. It's amazing how it knocks your confidence.

I then started another job and absolutely hated it. Deep down I knew it was wrong for me. Fortunately something else came up and I've never been happier.

I guess the reason for saying this is that hopefully your sister can take the positives out of the situation. She needs to ensure that the redundancy isn't a reflection of her performance and that ultimately, she may find a job that she likes even more.

Obviously I'm unsure as to the level of your sister's learning difficulties; however would a largish company be able to better serve her requirements. Normally they are more easily able to accommodate, than a small company with a handful of employees. I'm just wondering if she would have a better 'hit rate' with interviews, when it comes to larger companies.

Anyway, good luck once again. Tell her it isn't the end of the world. Hopefully in 12 months time, she'll look back and feel glad that the redundancy actually took place.

Company gone into liquidation & month's wages owed!

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