Employer unable to pay wages

Kayalana99

If they literally can't afford to pay wages, what makes you think he would get his pay out for redunancy if they went under?

dancing_star

Kayalana99 wrote: »

If they literally can't afford to pay wages, what makes you think he would get his pay out for redunancy if they went under?

Government payout:
https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you

sangie595

dancing_star wrote: »

Government payout:
https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you

But as I have already pointed out, that is only partially true. It works if your employer is legally insolvent - in other words if they declare insolvency. But the government scheme does not pay out if the employer simply stops trading and goes under. To enter insolvency actually costs money! So the company would have to file for liquidation and pay the appropriate fees. It's cheaper simply to stop trading and let your creditors and employees go whistle for their cash. Plenty of companies do it. And if that happens one or more creditors would have to apply to the courts (in other words, spend even more money) to have the company wound up. The cost of doing that, if there is no prospect of the company having any assets to realise, is prohibitive - it's simply throwing good money after bad.

Mersey_2

A Letter of Claim is the best way (it's polite and the only civil legal remedy). If the employer fails to respond after 14 days your OH can issue proceedings in the County Court at a cost of just £35+.


Contrary to what sangie595 claimed ("no one polices this nobody has a right to"), any firm doing so can be reported to its industry body and central Govt.
[As sadly such rogue firms also often fail to pay NICs, the NMW and so on]


Indeed any professional firm doing so is in breach (solicitors, accountants, medics, dentists, architects and so on) and will have its licence/cert revoked. Indeed to be in financial trouble is a specific breach of all of those prof firms regulatory compliance rules, but is also the case re CABs, churches etc.


Also no idea why sangie595 also claims "the cost of doing so would far exceed what is owed" - it simply would hardly ever be the case! The average sum of wages owed to an employee was £2,800 last year. In fact you can issue enforcement proceedings (to bankrupt a Director or wind up a company), or send enforcement officers after you obtain a CCJ from just £100.

Dragonfly74

Thank you all again for the responses.

I think they have decided to see what happens after the letter was given in on Friday and then they may go down the route of claiming the money owed. It doesn't look like they are wanting to go into insolvency as the company is now under a new name and has a different director, the other company is under the Name of a liquidator, I think he is better cutting his losses and getting out as this situation looks as if it will continue indefinitely .

I will post the outcome of what happens this week.

Thanks again

loskie

For the letter before action and CC Claim, does the OP have to name the company AND all the individual directors to better protect their claim?

sangie595

Mersey wrote: »

A Letter of Claim is the best way (it's polite and the only civil legal remedy). If the employer fails to respond after 14 days your OH can issue proceedings in the County Court at a cost of just £35+. Of course, that is £35 more than an empowerment tribunal - which is now free - and only tribunal judgments are backed by the government scheme for unpaid awards under the RPS.


Contrary to what sangie595 claimed ("no one polices this nobody has a right to"), any firm doing so can be reported to its industry body and central Govt.
[As sadly such rogue firms also often fail to pay NICs, the NMW and so on] But there is no evidence that any of these things have happened! There is no central government body even vaguely interested in whether a company has paid its workers. And no evidence that there is an industry body either.


Indeed any professional firm doing so is in breach (solicitors, accountants, medics, dentists, architects and so on) and will have its licence/cert revoked. Indeed to be in financial trouble is a specific breach of all of those prof firms regulatory compliance rules, but is also the case re CABs, churches etc. And where does it say that this is a professional firm? Or works under a licence or certificate of anything?


Also no idea why sangie595 also claims "the cost of doing so would far exceed what is owed" - it simply would hardly ever be the case! The average sum of wages owed to an employee was £2,800 last year. In fact you can issue enforcement proceedings (to bankrupt a Director or wind up a company), or send enforcement officers after you obtain a CCJ from just £100 From just £100 is "from" not "at". Enforcement procedures are pointless if a company had nothing for them to take to realise that money (and subsequently to this we now know that the company appears to have pheonixed already, so there won't be anything). And typically, the cost of creditors bringing a company to insolvency is £2 - 3,000.

It appears this is moot anyway now as the most recent information pours a new slant on it. But I know exactly why I said these things - because I am correct.

sangie595

Dragonfly74 wrote: »

Thank you all again for the responses.

I think they have decided to see what happens after the letter was given in on Friday and then they may go down the route of claiming the money owed. It doesn't look like they are wanting to go into insolvency as the company is now under a new name and has a different director, the other company is under the Name of a liquidator, I think he is better cutting his losses and getting out as this situation looks as if it will continue indefinitely .

I will post the outcome of what happens this week.

Thanks again

Are you able to explain exactly what happened here? When and how did the company do this, and who owes the money - which company? There now may in fact be some action you can take. Maybe not, but it's possible.

Dragonfly74

It's the new company that he is employed by now , they owe the money it is currently at 3 weeks. I just think they are hiding something , but at the moment it is so frustrating, he works hard and should be paid for it . It is such an uncertain time and very stressful .

sangie595

Dragonfly74 wrote: »

It's the new company that he is employed by now , they owe the money it is currently at 3 weeks. I just think they are hiding something , but at the moment it is so frustrating, he works hard and should be paid for it . It is such an uncertain time and very stressful .

No. You need to explain more. How can he be employed by another company? How does he know? What had happened? Who owes him money?

Believe me, these questions are very important, and could make a big difference to what we can advise you...