Urgent advice re redundancy payment

Westisbest1

My sister and her partner were both made redundant by the same company back in May. They worked there for 7 and 9 years, and were only given a weeks notice. They were told there was no money for notice pay, holiday pay owed, redundancy pay, paternity pay or maternity pay (my sister had just started her maternity leave)
This left them in huge financial difficulty, my sister was in hospital 2 hours away from home with pregnancy complications and subsequently had a 10 week premature baby who was very poorly. They had to borrow money just to buy food and pay rent and bills, but were told that as soon as the company went bankrupt they would get some money from the government. The company was owned by two people, although I believe only one had a financial stake. They have recently received some money for notice pay, maternity and redundancy, most of which has been used to pay off their debts.
They have now had a letter saying they have to pay back the notice pay as only one of the partners has gone bankrupt. They are really worried that the same will happen to the redundancy pay which is a much bigger amount.
I don't see how this can be right, they gave all the information they had, surely any money should be claimed back from the other partner, not my sister.

zaax

What sort of compnay was it, if was a Ltd co. the receiver should be the only person paying out money. If not and the other partner has money he has to pay. Speak to ACAS http://www.acas.org.uk/index.aspx?articleid=1339

Westisbest1

It's complicated as it seems the other partner withdraw large sums of money, but don't think there is enough evidence for a fraud investigation. They will not get money from her, not even sure where she is now.

sangie595

If it was a company limited by guarantee, it exists as a personal identity, so the bankruptcy of any individual has nothing to do with anything. But equally, they needed to have done something about the unpaid money within three months - the fact that they didn't means they will struggle to make any claim against the company. But my advice would be to ignore the letter and refuse to repay anything. They were owed the money, have spent it in good faith believing it to be theirs, and it is up to the company to prove they are not entitled to it. Since they are entitled to it, that won't be easy. But let the other side do the running and consult a solicitor if they don't back off.

Westisbest1

It is not the company asking for the money back, they had nothing from the company. Its the government! Which I think is wrong, they claimed in good faith, and it's money they were entitled to.

sangie595

Ah, sorry. You didn't mention that. That is an entirely different matter, and much more serious. They had no right to a claim from the government scheme unless the company was insolvent. They may have claimed in good faith, but they claimed incorrectly. Their claim was against the company. I am afraid that in that case they have no real options - they will have to discuss repayments. And it is entirely possible that the other payments will be reclaimed, so you need to get them to discuss this whole issue with the RPS to find out where they stand.

Westisbest1

Thanks for replies. So frustrating! They spoke to ACAS and were told to claim and gave all the info they knew. Once the business closed, there was no business so they didn't know the difference between the company going insolvent or her as the owner, not sure they even knew this other person was a partner, not just a manager. They will have to pay back in instalments but this will leave them in financial difficulty through no fault of their own.

sangie595

ACAS strikes again - they should have known that if the company is not insolvent the RPA will not pay without an employment tribunal decision, and even that is a lengthy and difficult process to get through. The RPS were also lax in not checking more carefully, but I am afraid that, in the end, it is the claimants responsibility to ensure that what they have stated is true. Closing a business is not the same thing as insolvency for a company.

The one thing that I am confused about here is the mention of the owners bankruptcy, because that would suggest this is not a limited company. With a company the employers have very limited liability as people. Are you absolutely sure that this was a company?

And unfortunately it is far too late to make a claim to an employment tribunal because that should have been done within three months, and again, ignorance of your rights is not an acceptable reason for extending the timescale.

Westisbest1

I'm not sure to be honest, I'll ask her to check. It was a care home, spread over two homes which have now been lost as part of the bankruptcy, so not sure if they were company owned or just owned by one of the partners. It's very complicated as they were misled over many issues, it was a terrible company. Thanks

sangie595

You can check at companies house. It is a public register and even closed / insolvent companies should be shown on the register.

The structure is important because if there is another owner and it is not a limited company, they can still sue the other owner through the civil courts. The risk there is that they pay out money that they still don't get, and in this case the RPS do not step in eventually as they would if it were an employment tribunal. But the legal status of the "partner" would also be critical, because it sounds as though your sister and her partner are not sure of any details.

The other obvious thing to do is to ask the RPS for a full explanation - they have to have a reason for their decision, and first you should check they are right (after all, they have been wrong once already); but also what the basis of their decision is.

PS - You may as well post the name of the company up here. It isn't libel to tell the truth, so if they went bust without paying your sister and her partner their entitlements there is nothing to worry about. I can check much faster than you can, and people here are great at research and would probably be able to tell you everything there is to know about the company in ten minutes flat!

Westisbest1

Ive asked her and it wasn't a limited company. There is nothing online about it other than it was a care home for adults. The bankruptcy order was for the owner.