Advice Sought - Wages unpaid for months

WorkQuestion

I work for a small start up high tech computer company in London backed by investors. The main shareholders and director of the company have been seeking further investments (as part of a larger fundraising for other companies in its portfolio) for a year but has failed to bring in consistent funding streams. As part of this process staff (including myself) have been asked to be patient during periods where the company has been unable to make payroll or rent. We reluctantly (verbally) agreed last summer (with the promise that all back salaries due would be cleared once 'the big investment' comes in). After sporadic periods where wages were paid, the CEO has failed to pay salaries since Christmas but was confident that an investor or buyer would be found imminently. Last week, one of the staff threatened (in writing) to bring in a 3rd party arbitration service but the CEO said if that happened, it would destabilise the fundraising and just slow things down / stop the investment round and the company would be unable to pay anyone anything... although he did then state that a short term investor had been found who would pay this months salary / put together a plan to clear the backlog. That was last week and we've still not seen any money or even details of what the plan would look like. We've now reached the point where more than half a year's salary is owed and I'm exhausting my savings and no longer have the means to employ a solicitor / fight an extended tribunal case and realise that by not starting a formal grievance process on day one I have given up some of my legal rights to much of what is owed - but at the time the plan seemed plausible and genuine. I am seeking other jobs in my sector nationally but am facing problems in terms of being able to pay for travel / how to explain this situation at interviews / what to do about current employer reference details. Any suggestions or advice?

getmore4less

Sounds like they are running an insolvent company

bet the director/shareholder has been paid.

enjoyyourshoes

Get CV updated now, start searching for new job ASAP, use your contacts with this job to get another. Don't use company email for job search, applications etc.
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undaunted

Seems to me that you've all already been more than patient / reasonable here and are in danger of working "endlessly" for nothing!


Your boss is being neither reasonable nor realistic. If you tried telling the mortgage co. / landlord, Council, utilities providers and supermarkets a similar story does he think they'd provide you with services on trust for the next 6 months whilst you wait for the big investment he can't even promise you / them will ever come?


In short your boss is either, far too optimistic, a fool or taking you all for one!


In my opinion you now each need to send a formal grievance letter demanding your contractual entitlements. How he finds that is a matter for him. If he doesn't pay you within the timescale requested and there are assets available that would enable you to realise your entitlements you should issue a County Court small claim (assuming it isn't now over 10k that he owes you) for breach of contract, including unpaid wages, any bank / other late payment charges you may have incurred as a result of not having received your wages before he bankrupts you all.


If there are no assets you may find yourself having to kiss your money goodbye I'm afraid. I know you too are hoping this investment will come and the job will come good but you say it's been 12 months, at times unpaid. How much more are you willing to risk losing before doing something? Even on the dole you'd have some money coming in where currently you have little or none for weeks / months at a time!


Unlike a tribunal hearing that requires you to apply to the tribunal within 3 months you can go to the courts for your full entitlement for upto 6 years. You do not necessarily need a solicitor to do this and it's not really a complicated issue that should require things to be too protracted - what possible defence has he got?



Whilst I know it's far from ideal to be out of work it may also be that if you signed on the job centre would help you with interview travel costs. I fail to see why you'd have any difficulty explaining this situation to a prospective employer - it seems to me that you've been more than accommodating & can quite reasonably tell it just as it is without need to worry that they would think badly of you - in fact I think it could even show you in a very favourable light in terms of likely behaviour they could expect personally

Good luck

tripled

The company is insolvent and shouldn't be trading. If it goes belly up then you should be able to claim some of what you're owed back from the NI fund (https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you). If they do have anything and they're protecting cashflow, then following the process of taking them to court is your only hope. Why are you still working for them though? Time for a new job.

WorkQuestion

Firstly - thanks to those that have replied so far.

In reply to some of the comments and add a little context...

Why am I still working for them? Initial plan seemed plausible and seemed to be better to have intermittent income and still in work when applying for jobs locally / commutable. The real problem has arisen since christmas - all wages now stopped for an extended period just before xmas, job market ground to a halt over christmas and only started to pick up in february. If I resign, I sign away redundancy rights / can't apply for JSA and invalidate my mortgage insurance... however, the latter may be moot point as its carried on so long.

Yes, I have updated my CV and am applying / getting interviews. The difference between last year and now is I have considerably dropped my salary expectations / expanded the area I am looking for jobs to the midlands and south of england not just London where I currently work - hence the extra pressure travel costs place on my finances. Also, my software specialism is very niche and I am applying on the edges / outside my field as well to expand my options - feedback I'm getting is I come across as a very good candidate... but not enough direct experience of X or Y. The subject of the why I'm leaving is coming up and seldom reflects well when pushed at interview - they also ask why I don't want them to contact my current employer before an offer (also trying public sector work where taking up references early seems more common place). Timing is also a factor - It's been over 10 years since I last made a move - indirect adverts / recruiting companies seem much more common and the time scales between applying / 1st / 2nd Interview and start date appears to stretch to several months now for the type of role / seniority I'm applying for - given my current financial situation that's a problem.

RE company being insolvent - it definitely ticks many of the boxes but unfortunately, he claims that provided there is a reasonable expectation of funding or a buyer, and no creditor is calling for the winding up of the company, he is not trading insolvently. I do not have access to the full accounts but know several major creditors are owed 6 months or more - he claims they are happy to hold off whilst he fund raises.

The (free / cheap) legal advice I've obtained to date suggests I can't declare myself redundant and sign on - I have to follow a grievance procedure and got to a tribunal but that this would take considerable time and money just to file that I no longer have. Also, I would need to explain why I can't provide references from my current employer or the CEO and why I am pursuing him via a tribunal - again, not positives at interview - in this sense, I've allowed the situation to become a perfect storm.

Have looked at the forum I may have filed this under redundancy whilst Job Seeking / Interviews may have been more appropriate - is there a way to transfer a thread across short of reposting?

Thanks again for your input.

undaunted

What reasonable employer is going to criticise you for expecting - and after waiting patiently - now demanding to be paid.


If your (former?) employer then refuses to give you a decent reference it will show him in a worse light than you I would think.


Whilst you can't just walk out on a paying job this is not a paying job - ask the job centre for their input on a claim rather than third parties. As to redundancy he has no intention of making you redundant, and even if he did how long have you been there / what do you think you're going to get? You may as well wait for a flying pig as stay on that basis!

getmore4less

How viable is the company/product underfunded is what kills many as they take too long or were never that viable in the first place.

The problem for any new investment is they see nothing for a big junk as it just gets absorbed and that will just get harder.

This could end up as a phoenix if there is something viable at the core.