No Formal Liquidation or Insolvency Practitioner

PennyMoney · 17 August 2017 at 2:53PM

My husband has worked for over twenty years for a small Limited Company ( he is one of only two employees ). The owner has suddenly, in the past week, ceased trading due to allegedly being insolvent.and says he has insufficient funds to pay for a formal liquidation ( hence there is no Insolvency Practitioner or CN reference that can be quoted to the Insolvency Service ). He says he intends to apply to voluntarily strike the company off the register at Companies House. Am I right in thinking that he will not be able to do that until the company has ceased trading for three months? If that is the case, will we have to wait until then to pursue any redundancy payment; also - will that have to be pursued via an Employment Tribunal?

sangie595 · 17 August 2017 at 6:34PM

Hmm. You need to talk to the Redundancy Payments Service immediately. If he doesn't close the company, it is entirely possible that they will refuse to pick up the redundancy payments. Simply ceasong trading does not mean that the government agency will immediately pay out.

PennyMoney · 19 August 2017 at 9:26AM

Thank you for your reply. I think we have a bit of a battle on our hands!

PennyMoney · 26 October 2017 at 1:11PM

Further to my previous posts we have applied to the Insolvency Service but are still awaiting a decision from them ( we applied to them seven weeks ago; they said last week that they were awaiting a reply from my husband's former employer but a phone call to them yesterday suggested they haven't actually written to him yet ). Because the three months deadline for applying to an Employment Tribunal is approaching ( our application to the Insolvency Service was initially delayed as they gave us conflicting information as to whether we could apply to them ) I have started started researching Tribunal procedures but as our "only" grievance is the non-payment of redundancy pay, pay in lieu of notice etc. am I right in thinking that an application to the Small Claims Court would be more appropriate?
The ex-employer has said that he doesn't have the funds for a formal liquidation; as far as we know he is still trading, possibly under an alternative company name. We had hoped to avoid the cost of legal representation but are starting to think that may be our only option

sangie595 · 26 October 2017 at 7:46PM

Who did you intend to take legal action against? If the company has no assets and is actually a registered company, then the company has no money to pay you anyway. In which case anything you spend will be throwing good money after bad. Tribunals are now free - but you still face the same problem. How well you get money that doesn't appear to exist.

PennyMoney · 30 October 2017 at 7:49PM

Thank you for your reply. The small amount of advice that exists for situations like this is so confusing; you've no idea how much your clear and very sensible comments are appreciated!
We have now received from the Insolvency Service their decision that they cannot consider notice pay, holiday pay or pay arrears as employer is not insolvent; ( decision yet to come from them re' redundancy pay ). They make what is presumably the standard suggestion that we may wish to apply to court for an order to make employer formally insolvent so I guess we now need to discuss this with the other employee to possibly share the cost etc.. I hope I'm not being too naive in thinking that if we are successful in our court application then they will review their decision.
I've told our ACAS conciliator of the Insolvency Service decision; he is adamant that an Employment Tribunal is the way to go but, particularly after having read your last reply, I'm not convinced!

sangie595 · 30 October 2017 at 9:04PM

PennyMoney wrote: »

Thank you for your reply. The small amount of advice that exists for situations like this is so confusing; you've no idea how much your clear and very sensible comments are appreciated!
We have now received from the Insolvency Service their decision that they cannot consider notice pay, holiday pay or pay arrears as employer is not insolvent; ( decision yet to come from them re' redundancy pay ). They make what is presumably the standard suggestion that we may wish to apply to court for an order to make empqloyer formally insolvent so I guess we now need to discuss this with the other employee to possibly share the cost etc.. I hope I'm not being too naive in thinking that if we are successful in our court application then they will review their decision.
I've told our ACAS conciliator of the Insolvency Service decision; he is adamant that an Employment Tribunal is the way to go but, particularly after having read your last reply, I'm not convinced!

Actually - and this is a red letter day, as it doesn't happen often - ACAS are correct. That's what I meant by tribunals are free (assuming that the months less a day - the deadline- hadn't passed). If your are going to attempt a punt at this, you go to a tribunal, because IF you can get a ruling you MAY get some of the money from the RPS, who are also responsible for unpaid tribunal awards in some circumstances. Worst case scenario is that it costs nothing and you get nothing. Best case - you may get something. I cannot give you any guarantees - but at least you'll only be out of pocket in terms of the time you put in, not more cash.

No Formal Liquidation or Insolvency Practitioner

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