Employment Tribunal - Company won't pay!

Boogins

I Need some advice on the best step to take next.

In April of this year I took ABC Electrical Services Ltd (not real name, initials have been changed) to tribunal for unfair dismissal and won.

After the tribunal I heard nothing from my previous employer.

When I hadn't received payment after 40 days I decided to use the new fast track system for High Court Enforcement.

My case was handed to Marstons HCEO to try and collect the debt.

To cut a long storry short Marstons have tried to collect on various occassions but are being given the run around.

ABC Electrical Services Ltd claim to be in an inequitable position and claim to not have the resources to proceed into liquidation.

Here's the interesting bit, 2 weeks after I won at tribunal the director of ABC Electrical Services Ltd registered a new company with company house calling themselves ABC CO. Ltd (the ABC initials are a logo exactly the same for both companies). This new company has taken possesion of all stock, vans and equipment and is running from the same address as the old company using the same phone numbers and logo as the previous company and doing exactly the same work.

As far as I can tell this has only been done to avoid paying me the tribunal award as they never believed that they were in the wrong, although quite blatantly they were.

I have passed on all this information to Marstons HCEO but they are still unable to collect.

I am unsure of where to go to next. I have looked into solicitors but at £200 per hour plus VAT don't know if I can afford this without any guarantee, and having represented myself at tribunal don't know if it is really necessary.

It was my understanding that what they are doing amounts to fraud but I am not 100% on this. If so who do I report this to and if this is classed as fraud and they get prosecuted would I get the money that is due to me?

Sorry if this post is a bit long but wanted to try and get all the facts down. Any advice will be greatly received as I am now starting to lose faith as to whether or not I will get my payout.

SarEl

I am afraid that there would appear to be little prospect of your getting your money. This type of thing is not uncommon amongst a certain, rather shady, set of employers, but it is quite legal. If they have set up a new company and have transferred the assets, then those assets cannot be claimed against as they do not belong to the company that employed you - they belong to another company which has no legal connection to the old one. Any debts that the old company had, including yours, can only be enforced against the old company, and if they are insolvent, albeit not declared such, they can sit there until a debtor applies for them to be liquidated - but nobody will because there is no purpose if you cannot get any money owed.

You might try discussing this with Company House to see whether all details of the transfer etc were done legally, but I would bet my inheritance that it was - I have come across this trick far too often and there is nothing that the law can do whilst companies are permitted to simply pheonix into other companies to avoid their debts.

zzzLazyDaisy

I agree with Sar El, you are unlikely to get your money in this scenario and may just have to write it off.

The best you can hope for is that a creditor puts the company into liquidation for debts owed, or that the directors decide at some point to wind up the company.

At that point you'd be able to make a claim to the RPO. You wouldn't get everything you have been awarded - to start with the compensatory award for unfair dismissal is not covered.

But you'd get the basic award.

Also, depending on what your claim was for, and how the award was made up, you may get:

• wages: up to eight weeks
• holiday pay: up to six weeks
• statutory notice: in full
• statutory redundancy payment: in full
• unfair dismissal basic award: in full
• protective award: treated as wages


The RPO also places a maximum amount on the weekly sum that it will pay out, and deducts notional amounts for tax and National Insurance.


But as long as no steps have been taken to put the company into administration or liquidation, you can't make a claim to the RPO, even though it may be insolvent.

Boogins

It was my understanding that in becoming a Director of a newly incorporated company which has either ‘assumed’ ‘purchased’ or ‘otherwise taken control’ of the assets of the old company makes them personally liable for the debts of that company or so I was lead to believe.
I also thought that a limited company which trades under a name similar to that of one which has been placed into liquidation was a criminal offence especially if they are seen to be using the same logos, phone numbers etc. On that note would I not be able to place the old company into liquidation, making the running of the new company a criminal offence?

zzzLazyDaisy

As a creditor you could apply to have the company put into liquidation. The problem is that it is expensive. I'm out of touch with the costs of these things now, but you'd probably be looking at upwards of £2,500. Since the RPO will only pay out limited amounts, you may find that you cannot recover enough to cover your expenses.

AFAIK pheonix companies are not illegal, although they can't have exactly the same name as the previous company - but I'm not an insolvency practitioner, so I'm happy to be corrected on this point.

SarEl

zzzLazyDaisy wrote: »

AFAIK pheonix companies are not illegal, although they can't have exactly the same name as the previous company - but I'm not an insolvency practitioner, so I'm happy to be corrected on this point.

Also not an insolvency practitioner - but I have seen enough of these to know a great deal more than most people! And I'm afraid I agree with zzzLazyDaisy. There is one particularly notorious company in my local area that has had, as far as I can trace, 7 such transfers. The director has morphed from being himself, to being his wife, his ex-wife, his two daughters, and various combinations of these; and his company has been ABC, AB&C, ABE... you get my drift. On each occasion the company has remained in the same premises, with the same phone number, and the same staff and assets. Believe me - if I could have "got him" I would have done so. I am afraid that the problem lies in the law, which enables people to do this over and over again, and quite legally. He has done it to avoid at least one tribunal judgement, and on many occasions to avoid suppliers and customers to whom he was indebted. As long as the law enables people to do this, it will continue and thousands of people will loose out.

Boogins

This all seems to be a bit of a shady area. When searching elsewhwere different advice has been given along the lines that, the new company should be held responsible for the old companies debt as the new company was started knowing for well that the old company had debt issues.
For all intentions this is out and out fraud and something should be changed in the law to stop these shady underhand type of dealings, especially as there seems to be quite a lot of it going on.
I just don't want to give up quite yet as it would mean kissing good bye to the best part of £8000, this doesn't even amount to a £1000 for each year I was employed, not a lot to ask for when the director is taking nearly £30000 a year in dividends!

Caroline_a

How about getting in touch with the local press? Surely there's a reporter who fancies himself as an investigative journalist..?

Boogins

Now theres an idea! Would make for a lovely juicy story especially as the director of both companies is my Uncle.
When i first started work for him it was just me and him and having helped him build the business up to himself and 3 employees, who i helped train this is the gratitude i get!!!
Don't you just love it!