Wages Owed

annoyed123_2

My husband and I were recently made redundant from a small local firm. The company is still running but as they now have no staff or service I can only think that they are only accepting monies owed to them but not paying any creditors. They have written letters to all employees saying that they have no money to pay outstanding wages, redundancy payment, or any other payments owed and if any creditors wish to call in the official receivers they should because they say they cant afford to do it themselves. We have a date for our Employment Tribunal yet can only claim our redundancy if they dont go officially insolvent. Any ideas what other measures we can take to claim all other payments back?

SarEl

annoyed123 wrote: »

My husband and I were recently made redundant from a small local firm. The company is still running but as they now have no staff or service I can only think that they are only accepting monies owed to them but not paying any creditors. They have written letters to all employees saying that they have no money to pay outstanding wages, redundancy payment, or any other payments owed and if any creditors wish to call in the official receivers they should because they say they cant afford to do it themselves. We have a date for our Employment Tribunal yet can only claim our redundancy if they dont go officially insolvent. Any ideas what other measures we can take to claim all other payments back?

Trading whilst insolvent - and in law I believe that they are doing so (although I am not an expert in this area of law), from what you say - is an offence. Report them yourselves. There is also a government scheme (or there was - maybe it got cut in the budget!) that recompenses employees whose employers cannot pay redundancy payments. It has criteria and caps on maximum amounts payable, and it's a long time since I ever had any dealings with it, but I know it was still around a couple of weeks ago! You'll probably find the information on Direct.gov.

Premier_2

I don't think the OP is saying the company is trading i.e. taking orders, accepting payments/deposits, getting goods/services on credit etc. They've just run out of money and sacked all the staff, but haven't ceased to be.

I think the OP is saying the company are simply chasing those who owe them money. If anything is recovered, that money should of course go to their creditors, but chances are without anything official in place, anything they do get will go the the creditor that shouts loudest, longest and most often.

If they fail to recover any money owed, and really have no money or assets currently, then I'm afraid it's like they say: you can't get blood out of a stone.

SarEl

Premier wrote: »

I don't think the OP is saying the company is trading i.e. taking orders, accepting payments/deposits, getting goods/services on credit etc. They've just run out of money and sacked all the staff, but haven't ceased to be.

I think the OP is saying the company are simply chasing those who owe them money. If anything is recovered, that money should of course go to their creditors, but chances are without anything official in place, anything they do get will go the the creditor that shouts loudest, longest and most often.

If they fail to recover any money owed, and really have no money or assets currently, then I'm afraid it's like they say: you can't get blood out of a stone.

This still counts as trading whilst insolvent I believe, although as I said, I am not an expert in this field of law. It is not up to them to "take in monies owed" and dole out payments to who they please (assuming they are doling the money out at all - which I doubt!). There are strict rules of procedure about ranking creditors (and employees are amongst the first of these). If they have insufficient monies to pay their debts then they are insolvent.

GEEGEE8

National Insurance Scheme pays for lost wages due to insolvency.

I am just going through this myself. We got the details from our administrators, but here's there number and maybe they can issue you some forms directly?

0121 456 4411

I think they also send a form out at some point where you can claim 1 weeks notice period too.

MyRubyRed

Just been through exactly the same situation with my husband. Ended up with the redundancy payment but not wages owed in lieu of notice, which we would probably have got had the company been declared formally insolvent
You need first to raise a formal grievance against the companyin writing. Advise them that you require written confirmationof the monies outstanding to you (values and calculation inc wages holiday pay, notice pay) and request info and payment date within 7days.
Send it recorded delivery. When your 7 days are up complete the tribunal form that Tribunals will send you. They will write to the defendant with a form the company must complete. Its likely the Tribunal will make a judgement without you having to attend and tell the company they must pay you by a certain date. Tribunals will calculate the due award using given formula. If the company don't pay..and it seems unlikley that they will you will then need to contact Redundancy Payment Service and get a form which you'll need to complete and send back. I can give you contact numbers and further detail if you want to PM me

Premier_2

GEEGEE8 wrote: »

National Insurance Scheme pays for lost wages due to insolvency...

But I'm sure that only applies if the employer is legally insolvent (it has a specific meaning under the Employment Rights Act 1996

183 Insolvency
(1) An employer has become insolvent for the purposes of this Part—
(a) where the employer is an individual, if (but only if) subsection (2) is satisfied, and
(b) where the employer is a company, if (but only if) subsection (3) is satisfied.

(2) This subsection is satisfied in the case of an employer who is an individual—
(a) in England and Wales if—
(i) he has been adjudged bankrupt or has made a composition or arrangement with his creditors, or
(ii) he has died and his estate falls to be administered in accordance with an order under section 421 of the [1986 c. 45.] Insolvency Act 1986, and
(b) in Scotland if—
(i) sequestration of his estate has been awarded or he has executed a trust deed for his creditors or has entered into a composition contract, or
(ii) he has died and a judicial factor appointed under section 11A of the [1889 c. 39.] Judicial Factors (Scotland) Act 1889 is required by that section to divide his insolvent estate among his creditors.

(3) This subsection is satisfied in the case of an employer which is a company—
(a) if a winding up order or an administration order has been made, or a resolution for voluntary winding up has been passed, with respect to the company,
(b) if a receiver or (in England and Wales only) a manager of the company’s undertaking has been duly appointed, or (in England and Wales only) possession has been taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the company comprised in or subject to the charge, or
(c) if a voluntary arrangement proposed in the case of the company for the purposes of Part I of the [1986 c. 45.] Insolvency Act 1986 has been approved under that Part of that Act.

MyRubyRed

Premier, not so I promise. Ive been through every step of this in the last 6 months
Though there are several hoops to jump through as we learned the hard way. It took us best part of 6 months to get owed redundancy but we lost out on outstanding wages/ notice in lieu which Redundancy Services will only consider if the company is formally declared insolvent. There is a cost to any company going down the insolvency route and if they have no money they aren't going to willingly do it and will go for a strike off with Companies House. Creditors can object but unless one or some of them have about £900 to throw at it then its a lost cause.

Premier_2

MyRubyRed wrote: »

Premier, not so I promise. Ive been through every step of this in the last 6 months
Though there are several hoops to jump through as we learned the hard way. It took us best part of 6 months to get owed redundancy but we lost out on outstanding wages/ notice in lieu which Redundancy Services will only consider if the company is formally declared insolvent. There is a cost to any company going down the insolvency route and if they have no money they aren't going to willingly do it and will go for a strike off with Companies House. Creditors can object but unless one or some of them have about £900 to throw at it then its a lost cause.

That's what I said, didn't I? :huh:

A creditor doesn't need £900 to object to a company attempting to strike itself off - a simple letter to companies house will do the trick (well, perhaps with a bit of evidence that the company owes the creditor money)

MyRubyRed

Premier wrote: »

That's what I said, didn't I? :huh:

A creditor doesn't need £900 to object to a company attempting to strike itself off - a simple letter to companies house will do the trick (well, perhaps with a bit of evidence that the company owes the creditor money)

Wrong I'm afraid. The initial objection with the evidence you outline will defer the objection for probably 3 to 6 months but unless you then pay up Companies House will carry out the strike off, unless there is another biggger creditor who forces it (HRMC for example)

MyRubyRed

I should probably add that a Strike Off done this way does not constitute formal Insolvency. The folks I spoke with at the Redundancy Service and at Companies House told me they see this cop out from companies every day of the week. And Companies House aren't allowed to disclose whether there are any other creditors. At that stage we hit a brick wall.