Company paying bills and paying staff late

CarlyS08

Hello,
I work for a company which is situated in a building both owned by the same person, however both business' are owned separately (we are a Tennant in the building, but 100% owned by the landlord, who also 100% owns the building). During COVID-19, the CEO has made the decision to pay some levels of staff late in order to prioritise the other companies bills (company . The bills 'order to pay' from company A are bills from Company B (rent etc) but allow company B to pay larger priority bills. On a couple of occasions, company B has chosen to insist company A pays the bills although company B are aware it would mean Company A do not make their payroll commitments. It is important to note, that this also allowed company B to Make their payroll, but disrupted company A. In other circumstances, we would not make these bills as the priority, but have no choice as we are owned by the same person. Are you able to advised what the staff are able to do?

Thanks so much!

[Deleted User]

You are confusing things, you are being paid late, that is the only issue. The fact that someone owes both companies and is paying invoices owed by one to the other is entirely irrelevant.

You are being paid late, which is a breach of contract, if you are furloughed then your employer should be submitting their furlough claim earlier to allow them to receive the funds in time, then paid as normal, if you are not furloughed then you should be paid on time from the company's retained profit, or cashflow. 

Now you come to the choice of what you can do, you can kick up a fuss, as is your legal right, if the duration of the delay was long enough you could even take them to court, but that would have to be months, not days or weeks. However the reality of it is that unless you are integral to the business that is likely to mean you are seen as a difficulty and you will probably find you are made redundant fairly quickly. 

In reality there is very little you can do, short of seeking alternative employment any action you take is likely to end up meaning you are no longer employed. I understand that is far from perfect and probably not the answer you wanted, but it would is unfortunately the reality of the situation. 

Mrsn

Not a great deal you can do sadly without it causing issues going forward if you carry on working there. 

You are entitled to be paid your specified wage on the agreed date in your contract, they are without a doubt in breach of that by paying you late. How long have you been employed with the firm?

Jeremy535897

See https://worksmart.org.uk/work-rights/pay-and-contracts/pay/our-employer-has-not-paid-us-any-money-week-what-can-we-do

unholyangel

To be frank, whether company A can pay their other bills is not any concern of company B. It's money that is due to them under the terms of the contract they agreed. If they weren't run by the same person, would you even be questioning this? 

CarlyS08

Mrsn said:

Not a great deal you can do sadly without it causing issues going forward if you carry on working there. 

You are entitled to be paid your specified wage on the agreed date in your contract, they are without a doubt in breach of that by paying you late. How long have you been employed with the firm?

I have been employed for 4 years now, they are choosing to pay particular people in the company and others late. when the money was taken from the account (at request of the owner of both companies) it was in order to pay the COO and relevant management of company B knowing (this is also written in an email) it would cause disruption to the PAYE of company A. From other comments, I can see that it's simply the choice of the shareholder, this will unfortunately be the 7th time we have not been on time. How I see it (and certainly understand that this can be 'just the way it is') is that the bills we are forced to pay to company B we wouldn't 'prioritise' if we were not owned by the same shareholder. Company A is beginning to sink into financial difficulty because company B make up invoices/force advance payments in order to save that company, but on the other hand cause risks in company A. I apologise as it sounds very confusing, but appreciate the guidance. 

unholyangel

CarlyS08 said:

Mrsn said:

Not a great deal you can do sadly without it causing issues going forward if you carry on working there. 

You are entitled to be paid your specified wage on the agreed date in your contract, they are without a doubt in breach of that by paying you late. How long have you been employed with the firm?

I have been employed for 4 years now, they are choosing to pay particular people in the company and others late. when the money was taken from the account (at request of the owner of both companies) it was in order to pay the COO and relevant management of company B knowing (this is also written in an email) it would cause disruption to the PAYE of company A. From other comments, I can see that it's simply the choice of the shareholder, this will unfortunately be the 7th time we have not been on time. How I see it (and certainly understand that this can be 'just the way it is') is that the bills we are forced to pay to company B we wouldn't 'prioritise' if we were not owned by the same shareholder. Company A is beginning to sink into financial difficulty because company B make up invoices/force advance payments in order to save that company, but on the other hand cause risks in company A. I apologise as it sounds very confusing, but appreciate the guidance. 

Assuming you're just talking about them prioritising rent over suppliers, that would be correct - commercial rent/mortgage is a priority debt. So they would have to prioritise it even if it was owned by someone else. 

That's not to say they shouldn't be paying you in line with your contract. But the two are separate matters. If you were incurring costs (late payment fees for example) because you were unable to pay due to your employer not paying you as stipulated by your contract, you'd potentially have a claim against them. 

I'd recommend looking for another job - although I expect this might take a while depending on your industry as current events have made it very much an employers market for most jobs. The sad fact is some employers will take advantage of that (just like they do everything else). In an ideal world, staff would be in a position to tell those employers to get stuffed and their customers/clients would care enough to not do business with companies who didn't look after their staff and those employers would be put out of business. 

But what we live in is far from an ideal world. Most people only care about how something impacts themselves (NIMBYs), not anyone else. Which is sometimes ironic as it can lead to it (whatever practice others are being subjected to) becoming more common and then those who didn't care previously, now find they're subject to the same conditions, only now its considered "standard".