Unpaid wages

Cosm0

Please help me unravel this fraudulent scheme and get unpaid wages.
I was employed (had a contract) for a company X from February 2014 till February 2016. Company X was incorporated by single person on January 2014. It is a Private limited Company (still active).
Nature of business:Human resources provision and management of human resources functions.
It appears to me that company X was incorporated on special purpose: just to manage factory workers and ensure factory works.
True owners of the factory was company Y (still active), incorporated a five years ago by group of individuals . It is also Private limited Company. Company Y bought factory in January 2014.
I don't know agreements and liabilities between company X and company Y but I know that wages and bills ( tools, safety gear etc.) been paid by company Y. Company Y was taking all profit from factory and then transferring some money in to company X account to pay wages.
Company X stopped to pay wages from December 2015. Director just sent rogue message by phone “sorry guys I have no work for you any more, Company Y director said you can work but you not guaranteed for any monies”.
Also he claims he has no money to pay wages for workers. A small group of employees was just abandoned and left with unpaid wages, unpaid holidays, unpaid notice period. Nothing.... Imagine , one day you just wake up and realise you don't have job, money, contract, nothing... just debts (because I have to pay bills, rent and council tax).
Currently I am on zero hours contract with agency and struggling to pay bills and taxes.
I sent letter to company Y and company X. Company X keep saying they don't have any money and pointing to company Y.
Company Y answered that they don't know me, do not have any employment contract with me and have no contractual relationship or any relationship whatsoever.
But I have emails from Director of company Y regarding factory work and orders regarding factory maintenance, was maintaining and repairing factory together..How painful is to hear such a lies from company Y director... I found out how difficult is to fight for money I have earned by my hard work. Firstly I needed a lawyer support. From all six solicitors contacted only Slater and Gordon Lawyers responded (thank you). They advised to contact ACAS.
But I sent to ACAS information only regarding Company X, my direct employer. ACAS do not know about this fraud scheme because I felt I have no relations to demand money from Company Y.
My concern is that even if I win case in court against Company X, they do not have money (Director keep saying, I don't know it is true or not, it might be another scam..) to pay wages etc.
Please advise.
Thank you

sangie595

They are right - you have no employment relationship with company Y, and any action you take must be against your employer. Companies are independent legal entities. If X employed you, X owes you the money, not Y. If X is not in liquidation, then your only option is to bring a claim against the company. You would need to do so in an employment tribunal, because if the company then cannot pay, the government scheme would step in eventually. But be warned, it's a long and arduous process - and you would have to win the case, then attempt enforcement, and then go back to the tribunal again if that enforcement doesn't work, before you will see anything. And even then, if the company simply continues to trade but has no assets, you may never see anything at all.

What you have described is, I am afraid, not a scam in the legal sense. It is perfectly lawful to operate in this way, and not all that uncommon.

Cosm0

What are you talking about? So easy to get away with this? How about personal liabilities of Directors and statutory requirements?

sangie595

I'm sorry - you have lost me. You do understand that the entire point of a limited liability company is based on limited liability of the directors? You have described nothing unlawfully negligent or criminal, which MIGHT make the directors liable. Your opinion that this is fraud is not supported by any actual evidence of fraud in law. Your only action available for unpaid wages is against your employer - not some third party.

You obviously didn't like my answer because it wasn't the one that you wanted. Unfortunately, that doesn't make it any less accurate as an answer.

jobbingmusician

Hmmm. Why did you leave? were you made redundant? I ask because even if your employer is bankrupt, you might be able to get some statutory redundancy from the state. And I wonder (I don't KNOW, I just wonder) whether turning over the redundancy stone might help with final wage claims from employees.

https://www.gov.uk/your-rights-if-your-employer-is-insolvent/overview

sangie595

jobbingmusician wrote: »

Hmmm. Why did you leave? were you made redundant? I ask because even if your employer is bankrupt, you might be able to get some statutory redundancy from the state. And I wonder (I don't KNOW, I just wonder) whether turning over the redundancy stone might help with final wage claims from employees.

https://www.gov.uk/your-rights-if-your-employer-is-insolvent/overview

Unfortunately the OP says that the company is still active and not insolvent. The government compensation scheme only operates on the basis of insolvency and tribunal rulings where the employer is unable to pay.


It is possible for creditors to apply to make a company insolvent - but it is wildly expensive and will likely cost more than the OP is owed (and the costs wouldn't be repaid). Employers like this one get away with it because they know this, so they are relatively safe from legal action that will have any impact on them at all. If they bet wrong, they simply wind up the company and start up another one - a process called "pheonixing". This means that they don't have any liability for the debt as the company is gone, and the new company has no liability because the debt follows the company not the individuals. It should be against the law, but it isn't. Even if a director gets "caught" doing something, you'll find the next company he runs will be in the name of the wife, the daughter or son, or some other relative or friend - being struck off as a director (which isn't at all that common anyway) doesn't mean you are finished, because you can simply set up a shell company with another named person and carry on as before.

Concerned75

Having been to a tribunal over unpaid wages and won, to this date I have not received a penny from the employer. Limited companies are a nightmare for being able to walk away or claim they have no money and then just dissolve themselves.
Sangie595 is right. They will just put what they have in a relatives name and even if the company is still trading AND you are given the wit/judgment, the chasing for money is down to you.
If you do go down the long winded route of tribunal as I did, consider what is owed overall against the court and enforcement officers fees. If it's worth the pursuit, I wouldn't discourage anyone from doing so, but I wouldn't guarantee results.
I hope you get some luck with this in the end.

Cosm0

sangie595 wrote: »

Unfortunately the OP says that the company is still active and not insolvent. The government compensation scheme only operates on the basis of insolvency and tribunal rulings where the employer is unable to pay.


It is possible for creditors to apply to make a company insolvent - but it is wildly expensive and will likely cost more than the OP is owed (and the costs wouldn't be repaid). Employers like this one get away with it because they know this, so they are relatively safe from legal action that will have any impact on them at all. If they bet wrong, they simply wind up the company and start up another one - a process called "pheonixing". This means that they don't have any liability for the debt as the company is gone, and the new company has no liability because the debt follows the company not the individuals. It should be against the law, but it isn't. Even if a director gets "caught" doing something, you'll find the next company he runs will be in the name of the wife, the daughter or son, or some other relative or friend - being struck off as a director (which isn't at all that common anyway) doesn't mean you are finished, because you can simply set up a shell company with another named person and carry on as before.

Solution for others who will might be in similar situation:
either go online https://www.gov.uk/claim-redundancy
or
phone 0330 331 0020 Redundancy Payments Helpline. Actually I phoned them, explained that employer does not respond to my query "who is insolvency practitioner?".
Within five minutes received email from them "
As discussed in our telephone conversation, please find attached a Word template document. Please fill this in with your contact details & the company details and return it to us by email.

This will allow us to setup a case on our system for the company and you will then be able to submit your RP1 claim form online."
After so many days of frustration finally met right people.

Cosm0

That's why we paying our National Insurance payments so people can be compensated for statutory payments when a company refuses to pay wages.

sangie595

Cosm0 wrote: »

That's why we paying our National Insurance payments so people can be compensated for statutory payments when a company refuses to pay wages.

Actually it isn't. According to your original post the company HAD NOT gone into insolvency. Your answers were based upon that statement. If the company is not in solvency then you can fill in as many forms as you like and you won't get any money out of the RPS because they will ONLY pay if firms are both insolvent and unable to pay - not unwilling to pay. Otherwise no employer would ever pay their employees.

Cosm0

Sangie - have explanation sent by Acas: If company does not pay wages, it is automatically becomes insolvent. (because the employees are the company creditors). Even if company does not start insolvency process.