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What help may she get?

A friend works full time and her company has just called in the administrators. She's worked there 25 years.

She says staff have been told their monthly wages, due mid month, will definitely not be paid and even if a buyer comes forward, it will then be a further 6 weeks without pay as suppliers etc need to be paid first.

Can the company do this? What can my friend - and other staff - do about money for bills and food etc. during this time?

Thanks
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Comments

  • Russe11
    Russe11 Posts: 1,198 Forumite
    Its not so much a choice as the law requires them to go into administration.

    They would be breaking the law, that is if the company carried on trading knowing it was insolvent.

    All the advice you need is very easy to find via internet search engine, if said friend does not have access to the internet, help and guidance from the CAB is prob the best resource.

    Must be annoying to just be told at the time rather than the company giving some direction that its experiencing financial problems, though its easy to understand why only those in the know would have that knowledge.
  • zaksmum
    zaksmum Posts: 5,529 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    She's been told this morning that the company will trade until further notice but wages mid month are far from guaranteed.

    I've never heard of this happening before. I can't see how staff will work on without their wages being there for them.

    She's beside herself with panic.
  • antrobus
    antrobus Posts: 17,386 Forumite
    zaksmum wrote: »
    A friend works full time and her company has just called in the administrators. She's worked there 25 years.

    She says staff have been told their monthly wages, due mid month, will definitely not be paid and even if a buyer comes forward, it will then be a further 6 weeks without pay as suppliers etc need to be paid first.

    Can the company do this? What can my friend - and other staff - do about money for bills and food etc. during this time?

    Thanks

    If administrators have been appointed then it's the administrators who are now running the company. Normally the administrators will communicate with the employees to explain what is going on and explain how it all effects them. It is very probable that they won't feed the employees any porky pies about "suppliers etc need(ing) to be paid first" since they will be well aware of the fact that arrears of wages rank as a preferential creditor.

    http://www.pwc.co.uk/business-recovery/administrations/brs-admin-faq.jhtml
  • HB58
    HB58 Posts: 1,787 Forumite
    1,000 Posts Combo Breaker
    The company my husband worked for went bust 20 years ago. The workers were laid off without the statutary notice or pay. The government paid lost wages and the basic redundancy money eventually but we had to wait the best part of six months for it!

    I don't know whether the situation is th same these days.
  • zaksmum
    zaksmum Posts: 5,529 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    She turned up for work this morning as staff had been told anyone who didn't come in would be deemed to have resigned. All staff were sent home within the hour and the store closed.

    She's been told a letter will come in the post explaining the position.

    Meanwhile, like many people, she has no savings at all and will have only her DLA coming in.She also gets WTC but I expect this will have to stop now?
  • princessdon
    princessdon Posts: 6,902 Forumite
    An acqaintance had the same this last week.

    for a family of 5 they got £71 pw JSA CB. No Tax Credits, no CB, nothing.

    They won't be paid either until the receivers. They weren't paid for January, and they have 2 months nursery fees (jan and feb) due as need to give 30 days notice. Last pay was 20 Dec as they paid early for Xmas.

    But at least in your friends situation, the WTC has a 4 week run on, and they can get Income based JSA for other benefits.
  • zaksmum
    zaksmum Posts: 5,529 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    If she gets income based JSA can she also get some kind of help with her mortgage or will she need to ask her lender about a mortgage holiday?
  • princessdon
    princessdon Posts: 6,902 Forumite
    zaksmum wrote: »
    If she gets income based JSA can she also get some kind of help with her mortgage or will she need to ask her lender about a mortgage holiday?


    SMI is payable after 13 weeks. My friend, however, got a 12 mos mortage holiday (they won't get Income JSA) so it's definitely worth a call to ask the mortage company.
  • satarical
    satarical Posts: 211 Forumite
    If it was even hinted at that I would be working but with no guarantee of being paid for it, I would 'down tools' put my coat on and wave everyone goodbye!
  • zaksmum
    zaksmum Posts: 5,529 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    satarical wrote: »
    If it was even hinted at that I would be working but with no guarantee of being paid for it, I would 'down tools' put my coat on and wave everyone goodbye!

    That's what I thought but my friend said their boss told them that anyone who did that would be considered to have resigned of their own accord and therefore not qualify for any redundancy pay or other payments that may materialise.
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