Unpaid for 8 weeks. Potential take-over. Rights?

MishterTea

Hi all,

Looking for some advice. I work for a small company (< 10 employees) privately owned by our boss. I've been with them for just over 2 years. We're normally paid at the end of the month but last month this didn't happen. This was due to our main creditor not paying up. It's looking unlikely that this money will turn up any time soon (there is a legal battle ensuing) and it seems the bills are mounting up for the company (wages, PAYE, rent, utilities etc..).

We're aware that you can claim back up to 8 weeks (albeit capped) unpaid wages, holiday, PILON and redundancy from the National Insurance fund if the worst case happens. It's been mentioned that the company might not be technically insolvent as it's owed money (?) but if we were laid-off/made redundant we'd still be able to claim. We're now into that 8th week.

Over the past couple of weeks we've had an investor looking to take us over. It's looking quite positive on that front. We were told yesterday however that if the deal with the investor goes through we might not get our owed pay. Is that fair and even legal as we're effectively creditors of the company?

We're all very close as a company and really want to keep things amicable but if we get to the end of this 8th week and a deal hasn't been struck with the investor what would our rights be? As creditors can we force closure?

I guess the other issue of course is that in this limbo state we're unable to get other work/claim JSA until we receive a P45.

Many thanks for any advice,
- Richard

jim_walton

If the deal with the investor goes through and you don't get what you are owed sounds totally illegal to me, in act it sounds like robbery...

MishterTea

Hi,

Further update/questions on this situation:

Last week (26/11) we received "the letter" - the company that we work for is insolvent and is being handed to the administrators. We asked who the administrators were and were told that it's now in the hands of the company accountant. We left on the understanding that we would be contacted by the administrators.

Today, one of my colleagues contacted the accountant to find out what's happening. They were told "I'm not an insolvency practitioner and so have nothing to do with the winding up of the company". When asked if they knew who the administrators were the response was "There's nothing to administrate as the company has no assets" and advised to get in touch with the Dept. of Employment.

Is it correct that administrators aren't required? The company has debts, including ourselves (employees) as creditors - surely something has to be done to wrap all this up?

As I understood it, the administrators would be called in and would contact us with the necessary forms to claim unpaid wages etc.. Should we be expected to chase this up ourselves (statutory or otherwise)?

Any advice would be greatly appreciated.

Many thanks,
- Richard

MishterTea

Hi,

We're now a week on and things aren't getting any better. The aforementioned accountant called us last Friday (4/12) to let us know he provided our boss with the details of an Insolvency Practitioner and claimed the boss would be contacting them that day. We too got the details of the IP and have contacted them on a couple of occasions since. They are yet to hear from our boss.

So we've now established that an IP/Administrator is required but that's about it. Seems our boss isn't in any rush to wind things up. Has anyone had any experience forcing administration as an employee? It's something we're considering but from what we've been told this could be quite a costly process - something we really can't afford to do! Ultimately it just seems a bit wrong that we have to pay to try and claim back money we're owed.

It seems we're stuck in this horrible limbo state - as I gather, we can't claim JSA or fully move on work wise until this is resolved as we're still technically employed?

Sorry for the long posts, this is becoming quite an unpleasant situation and any advice or experiences would be greatly appreciated.

Regards,
- Richard

MishterTea

I guess to sum up:

- The company we work(ed) for went insolvent
- We're owed money
- We're waiting for administrators
- Boss seems in no rush to call in administrators

What can we do as employees as we need the money we're owed and company closure to move on with new work/JSA?

Willsnarf1983

sorry to hear your strife but I just wanted to reply because no one else had which is very surprising for this board!!!

I do not know the answer I am afraid but I would guess that you need to assume that your Boss's company isn't insolvant as of this moment if the administrators haven't actually been called in and thus you need to explore the other avenues of non payment of your wages such as a employment tribunal and at the very worst this may hurry your boss up if he is going to make it insolvant. I would suggest talking to ACAS for this though first!

HTH

Will

Emmzi

my money is on boss siphoning off assets before declaring insolvency.

ACAS would be my suggestion too.

And small claims for the wages maybe - just to scare them. Can you find a small amount to pay for money claim online?

MishterTea

Cheers for the replies. Just as we were losing hope we were informed today that the boss has finally instructed the Insolvency Practitioner and we should be receiving the relevant claim forms next week. Phew.

Thanks again,
- Richard