Redundancy and CVA

k1mmyc

My husband was told by letter dated 15th May that his role had become redundant. The letter states his employment will end at the end of 80% furlough on 31 July. The letter also states he will be paid for any holiday entitlement, statutory redundancy (3years) with his last salary payment. Although we felt he was being discriminated against because of a certain person and their behaviour towards him during the last 6 months, we felt the company were trying to be reasonable, so decided to see how things panned out before making a formal complaint.

Then a letter arrived dated 16th June, stating the company is proposing entering a Company Voluntary Arrangement, he is told in the letter he will need to make a claim to the National Insurance fund for his redundancy and outstanding holiday. Can they change the rules like this? Can they propose a CVA a month after the redundancy and expect the government to pay redundancy pay and holiday pay?

My husband then got a new job which he started last week.  He will not get paid until end July.. The old company confirmed in writing on 10th June he can take the new job whilst still on furlough and will be paid furlough until the 31st July. This would have helped the transition from weekly to monthly pay immensely. 

Today the company state they will no longer pay furlough, can they do all this?

Jeremy535897

If the company is entering a CVA, it is insolvent. See https://www.gov.uk/your-rights-if-your-employer-is-insolvent

k1mmyc

Thank you I have seen that already, I want To know if it’s ok to close the stable door after the horse has bolted and about the u turn relating to furlough.. Plus, they still have a considerable number of other staff who have not been made redundant.. Can they do all this after the event?

sharpe106

The situation changed so they can change what was offered, as at the time offered they were not going through CVA. Although the redudancy pay still needs to be paid, it is less clear on the notice as he has left and has a new job. Before they were happy to pay it as was basically there own funds now with them being in CVA it will be the government picking up the tab so will be based on the government rules.

Jeremy535897

The company will have to establish what it owes and agree with its creditors what and when it will pay them. Entering a CVA stops any recovery actions by creditors.

Thrugelmir

k1mmyc said:

Thank you I have seen that already, I want To know if it’s ok to close the stable door after the horse has bolted and about the u turn relating to furlough.. Plus, they still have a considerable number of other staff who have not been made redundant.. Can they do all this after the event?

Many of the remaining staff may well find that their jobs are now at risk. As the business has to be put back onto a sound financial footing. A CVA isn't something to be undertaken lightly. With creditors receiving only a fraction of what they are owed. 

k1mmyc

Thank you..