Redundancy For Directors

Hypothetical_2

Until recently, I was a director of a company and had a 50% shareholding. The company has entered into voluntary liquidation.

I've been told that redundancy payments to non-minority shareholding directors is a grey area and that I would have to demonstrate 'employee' status.

I'm looking for advice on how best to demonstrate employee status. After grafting as hard as any of the employees (often doing the same job) for nearly a quarter of a century, I'd hope that could get at least something.

Hypothetical_2

No, nothing at all fraudulently.

Just worked my butt off for nearly 25 years for the most part doing exactly what all the other employees did.

Then came the economic storm caused largely by greedy bankers! Perversely, I've lost my job and may get nothing out of it, the banks were bailed out by taxpayers like you and me and the bankers continue to take inflated bonuses.

I suppose I must have been in the wrong job!

getmore4less

If the compny has no money it would need to be from the goverment pot.

Were you paid did you have an employment contract, that would be as an employee with tax and NI etc.

Was a lot of your renumeration in dividends/shares?

No idea what the rules are to qualify.

If the compny has no money it would need to be from the goverment pot.

The goverment pot would be capped at £380pw, max service is 20 years 1week per year and max payout is 30weks pay with 20years service over 41 earning 1.5 weeks per year.

max payout £11400 if you could qualify.

Hypothetical_2

The contract was verbal, working to set hours, and remuneration was by a combination of dividend and PAYE.

anamenottaken

Hypothetical wrote: »

The contract was verbal, working to set hours, and remuneration was by a combination of dividend and PAYE.

The contract was a contract.
The PAYE operation would confirm you were an employee.

When fully liquidated, do you expect all bills to be paid? If so, as a shareholder you would get your share of any balance.

If the company couldn't meet all its liabilities then you would be in the same position as all the other employees alongside whom you have worked. Over the past year, was your PAYE pay £380/week or more? If it was less, then your redundancy pay would be based on the lesser amount.

Hypothetical_2

anamenottaken wrote: »

The contract was a contract.
The PAYE operation would confirm you were an employee.

When fully liquidated, do you expect all bills to be paid? If so, as a shareholder you would get your share of any balance.

If the company couldn't meet all its liabilities then you would be in the same position as all the other employees alongside whom you have worked. Over the past year, was your PAYE pay £380/week or more? If it was less, then your redundancy pay would be based on the lesser amount.

That's the content I wanted to read but alas I don't think it is so cut and dry in reality.

This is evidenced by the content of an unsolicited letter I have just received [TEXT DELETED BY FORUM TEAM] offering a no win no fee service aimed at obtaining redundancy payments for non-minority shareholding directors. If successful, they would charge a flat fee of 10% of redundancy moneys obtained unless the matter was referred to Employment Tribunal, in which case they'd be looking for "a conditional fee of 20%".

Ideally, I would like to hear from an ex non-minority shareholding director who has been successful in obtaining a redundancy payment following the liquidation of his/her company.

zppp

You need to make a representation in writing to the insolvency practitioner that you had a service contract with the company albeit not written, and the terms of that contract. I would do this prior to taking possibly costly legal advice.

Payment of staff is relatively high up on the list of prefernce of creditors, after secured creditors and crown debts and before unsecured creditors.

Vomityspice

Did you have a long term service contract? (S.188 Company Act) that has been approved by the shareholders?