Employer not paid salary for last month and next month is unlikely too...

Tweetinat

We've just come back from honeymoon to find that my Husband won't be getting paid this month (with 5 others) and next month is looking unlikely too. I'm just looking for some advice on what the best course of action for him is, but before that some background:

1. DH has worked for this company for 13 years.
2. The day before our wedding (28th August), he was informed that the company had cashflow problems and was requiring a number of individuals to take on 'contracting' work to bring revenue into the company to cover their salaries.
3. He was informed that August pay would be covered (29th August) but if contracting work was not found they may have to consider pay reductions.
4. Upon return from honeymoon (22nd September) he found that no contracting positions has been found for those affected.
5. Yesterday (29th September), he was informed that he would not be getting paid this month (31st September) and that even if funds were found for Octobers pay, he would not be getting any money reimbused for Septembers salary and to consider that 'sacrificed for the good of the company'.
6. We have called ACAS (simply told to see a lawyer) and spoken with my Employee advisory service who have advised that although he could leave and justifiably claim for constructive dismissal, it is a long process and if the company goes into liquidation then he is unlikely to get anything. They would suggest suing for breach of contracts through the courts which is likely to get his money quicker.
7. His company have limited assets - everything is leased and they have structured the company in such a way that the entity employing him (CoA) has pretty much £0 in the bank. The majority shareholder of this entity (which is the parent company CoB) 'contracts' services from CoA and this is how they get money to pay the other individuals salaries who aren't affected by this.

So there's the background as simple as I can make it. My DH is keen to do the right thing so that *if* he decides to make a claim against them they have absolutely no mud to throw on him. The options that I can see we have are:

1. He continues to "work" there on the basis that he may get paid in October & job seek whilst doing so.
2. He continues to "work" there but begins the process of suing for breach of contract through the courts.
3. He resigns and then makes a claim for breach of contract/constructive through an employment tribunal.
4. He resigns and then makes a claim for breach of contract/constructive through an the courts.
5. He resigns and lets it go - finds another job and forgets this nasty mess.
6. Some other option...

So that's my lots - any input, advice or suggestions will be gratefully received.

TIA

nzmegs

You seem to have summed it up - sometimes just writing your thoughts down can clarify them. My opinion is that he should get another job asap, hand in his resignation and sue for breach of contract if he believes the company has the money.
To work for no money or a vague idea you might get paid is just daft...loyalty can only be taken so far and working for the "good of the company" is just ridiculous. he is currently working for the owner of the company - to prevent them from going into liquidation or bankruptcy.

Incisor

All of the above.

He should do whatever he needs to for his job search in company time, eg attend interviews. He needs to have a bit of brass face, but if he does get an interview, he should book leave and tell them he is out for the day or the afternoon, not ask, and if they challenge it, just tell them he's taking the time on account and they must sacrifice the time for their employees' good.

Really, the way the finances are being organised, this is nearly a fraud.

londondulwich

So long as an employee offers his services and is ready and willing to work, they are generally entitled to payment from the employer.

Where the total amount of any wages are less than the total amount of the wages that are properly payable, the amount of the deficiency is treated as a deduction.

If no wages have been paid then the deduction is the full amount that should have been paid.

Your partner may present a complaint to an employment tribunal to demand his pay. He must do so within three months of the date of the payment, or in this case, the non-payment.

If the employment tribunal decides that the claim is well founded it will order the payment.

Your partner does not have to resign to bring this claim.

Failure to pay wages is considered a fundamental breach of an employment contract.

A fundamental breach would entitle your partner to stop working for the employer and claim constructive dismissal. In effect he is saying that he has been forced from his job and so would also claim unfair dismissal.

The damages from an unfair dismissal claim would cover him from when he leaves until when he finds new work.

Tweetinat

Thank you all for your support and advice. It's nice to know that I'm not the only one who thinks they're being dodgy in the way they're handling this!

As it happens, he found out yesterday that decisions re: redundancy are being made on Monday, so he's decided to stay until then at least to find out where he stands then. We'll re-assess at that point our options, although we're erring towards taking them to an employment tribunal.

He's actually off at an interview right now and is planning on meeting with an employmemt lawyer this afternoon. The info you have londondulwich was excellent and gives him something to discuss with them.

One thing I wanted to know though (and I'm impatient so hopefully someone can answer), is that if they announce he is being made redundant (with the basic entitlement) on Monday, can he still take the non-payment of September's salary to an ET? Or does the fact they've offered him *some* money, dismiss his claim? Or make it stronger in that they obviously could have paid him, they just chose not to?

TIA.

pinkshoes

I remember one of my colleagues telling me a few weeks ago that something similar happened to him once. The company he worked for stopped paying their wages, then eventually went bust. All the employees tried to claim their 3 months of unpaid wages, but after all the company debts were paid, they ended up wiht about £80 each, so it was hardly worth it.

I think he's doing the right thing holding out to see if he gets made redundant (although with 13 yrs service, they might pick those who would be cheaper to let go!) as well as searching for a new job.

Tweetinat

Thanks for the support pinkshoes - I'm pretty certain the company will only do the statutory minimum which only amounts to £4290 (which I think you get tax free?) - this doesn't even amount to one months gross salary for him, which for 13 years service is absolutely appalling (I think).