Big problems - wages not received

Alexey_Don

Essentially this is a long story. So apologies. 

I started a new job in dec’ 20, production of mechanical components, it’s a slightly unusual arrangement as it’s a group that own about 8 engineering firms, the top director of the group took me on and I had 9months no major issues. Didn’t see the top man very often but I figure that was understandable. 

He seemed to be spending a lot buying big top of the range machinery saying that we were supported by other companies with in the group plus excellent finance deals from machine suppliers, the plan was to set this factory (where I was based) up to be the best it could be. 

Then I started to hear suppliers were chasing a lot of money, bailiffs visited a couple of times, but boss says it’s a minor !!!!!! up all is well, he always has an explanation. Suddenly at end of Oct the wages don’t get paid, this applied to half of the companies in the engineering group, i believe it’s approx 100+ employees across the group. Boss is largely uncontactable apart from about 3 emails in the space of 10 days, each says it will be another couple of days trying to release money from accounts/chase debtors/find investors etc, these repeated promises and no money comes through. 

I promptly decided this is going side ways fast and move back to my old job, in doing so I hardly worked any notice. My attitude was that they were not paying us and that was not sustainable personally, I have a mortgage and a family to provide for. Communication has broken down with no information coming from the top and middle management seemingly unable to make decisions with all this mess going on. I sent an email to my line manager stating that I intended to give 1 weeks notice (my contract states I should give 1 month), and that I wished to use holiday for that 1 week period essentially meaning that i do not intend to return with immediate affect. Now over 3 working days later and I haven’t even had a response to that email. 

Within the space 1.5 weeks from when the wages should have been paid it seems the company is in rapid collapse, lots of people have resigned, customers have taken work away, more bailiffs have threatened to drill locks, cut off energy supplies, disgruntled business partners have arrived threatening physical violence demanding to know the top boss’ family address etc.

I (and many colleagues) have begun proceedings with ACAS for early conciliation to retrieve the Oct wages I’m owed but don’t hold out much hope of that having a result. After that the intention is to progress to tribunal. 

I am a little concerned that my lack of notice could be used against me in my claim for funds owed to me. I really felt I had no choice but get a trust worthy income ASAP. 

Does anyone have any experience with these sort of matters?

if you still reading, well done for making it this far, I expect that was quite a slog. 

Undervalued

Alexey_Don said:

Essentially this is a long story. So apologies. 

I started a new job in dec’ 20, production of mechanical components, it’s a slightly unusual arrangement as it’s a group that own about 8 engineering firms, the top director of the group took me on and I had 9months no major issues. Didn’t see the top man very often but I figure that was understandable. 

He seemed to be spending a lot buying big top of the range machinery saying that we were supported by other companies with in the group plus excellent finance deals from machine suppliers, the plan was to set this factory (where I was based) up to be the best it could be. 

Then I started to hear suppliers were chasing a lot of money, bailiffs visited a couple of times, but boss says it’s a minor !!!!!! up all is well, he always has an explanation. Suddenly at end of Oct the wages don’t get paid, this applied to half of the companies in the engineering group, i believe it’s approx 100+ employees across the group. Boss is largely uncontactable apart from about 3 emails in the space of 10 days, each says it will be another couple of days trying to release money from accounts/chase debtors/find investors etc, these repeated promises and no money comes through. 

I promptly decided this is going side ways fast and move back to my old job, in doing so I hardly worked any notice. My attitude was that they were not paying us and that was not sustainable personally, I have a mortgage and a family to provide for. Communication has broken down with no information coming from the top and middle management seemingly unable to make decisions with all this mess going on. I sent an email to my line manager stating that I intended to give 1 weeks notice (my contract states I should give 1 month), and that I wished to use holiday for that 1 week period essentially meaning that i do not intend to return with immediate affect. Now over 3 working days later and I haven’t even had a response to that email. 

Within the space 1.5 weeks from when the wages should have been paid it seems the company is in rapid collapse, lots of people have resigned, customers have taken work away, more bailiffs have threatened to drill locks, cut off energy supplies, disgruntled business partners have arrived threatening physical violence demanding to know the top boss’ family address etc.

I (and many colleagues) have begun proceedings with ACAS for early conciliation to retrieve the Oct wages I’m owed but don’t hold out much hope of that having a result. After that the intention is to progress to tribunal. 

I am a little concerned that my lack of notice could be used against me in my claim for funds owed to me. I really felt I had no choice but get a trust worthy income ASAP. 

Does anyone have any experience with these sort of matters?

if you still reading, well done for making it this far, I expect that was quite a slog. 

Whilst they cannot legally withhold what is owed to you for work done (or untaken holiday) in response to your lack of notice that sadly doesn't mean they won't!

Theoretically, although not common and probably even less likely here, they could separately make a claim against you for any unavoidable losses caused by your failure to work your contractual or statutory notice. In the unlikely event of that happening you would have a reasonable defence if you genuinely believed you were not going to be paid.

Legally you have no right to insist on using up your untaken holiday during your notice period. That is up to the employer, although obviously if they refuse they will have to pay you for the untaken holiday after you leave.

Sadly often these situations degenerate into a standoff, effectively "you sue us and we will sue you".

Alexey_Don

Yeah, from the story’s I’ve heard recently I suspect that they will try to use every detail available to avoid paying/reduce what is owed.

I wonder now whether the best outcome for me would be the company going insolvent? I’ve heard that if that happens I should be able to claim 80% of wages owed and that it should be a relatively straight forward process. 

superbigal

Slight problem if the company goes insolvent you are not going to be listed on the payroll handed to the administrators.

Jillanddy

superbigal said:

Slight problem if the company goes insolvent you are not going to be listed on the payroll handed to the administrators.

More than slight! The minute the OP left, they became an unsecured creditor. The fact that the debt is wages is irrelevant - in law it is now just another debt. So if the company now becomes insolvent, then the first call on any money or assets will be those people currently working for the company. After the priority debts, then anything left (probably nothing) will go to be divided amongst the remaining creditors on a percentage basis of the total debt. In short, the OP will almost certainly never see a penny. 

On the other side of the coin, the OP could go to a tribunal and win it, but then the employer - if they still exist - will probably not pay up. The OP will have to pay to enforce the judgement, and it is unlikely that will turn up any money either, so they will be even more out of pocket. 

These things seldom work out happily. And my bet, if anyone wishes to take me up on this, is that every single bit of machinery, every asset, and all money, is now vested in one of the other companies where it cannot be touched. 

Alexey_Don

I had not realised that I would now be at the back of queue in the case of insolvency but still think my only option was to go out earn money elsewhere ASAP. I decided this within a couple of working days of lack of wages which may seem rash but so much has come to light on that time and we are now 2 weeks later and no closer to being paid. I’ll look more into this. 

Jillanddy - I’ll take that bet! He owns nothing, everything is financed. 

Jillanddy

Alexey_Don said:

I had not realised that I would now be at the back of queue in the case of insolvency but still think my only option was to go out earn money elsewhere ASAP. I decided this within a couple of working days of lack of wages which may seem rash but so much has come to light on that time and we are now 2 weeks later and no closer to being paid. I’ll look more into this. 

Jillanddy - I’ll take that bet! He owns nothing, everything is financed. 

You don't understand. He has never "owned" anything. The company owns it. The company may have taken loans for finance. But the company own the machines. So what happens is that the company sells the machines for £1 or some other low figure to another company in the group. The finance companies cannot come after the second company as they have no relationship with that company, and in law the second company have done nothing wrong in buying the equipment. It's the oldest trick in the book. The finance companies don't really care all that much - they will have insurance and tax writes offs for this, because they know that it will happen no matter how much due diligence they put into checks. Their finance models assume it. So you'd be an idiot to take the bet - you'd lose!

And I certainly don't blame you for cutting your losses. I would do the same in your shoes. Too many people hang around waiting for someone to solve the problem. It seldom ends well.