Made redundant because of insolvency, but business not actually insolvent

ClaraSolis

Hey, I need some advice, as I'm really not sure on what to do. 

For 7 years I worked for a small company, basically as the only employee under my boss (apart from a few apprentices years ago). Because of the pandemic, I was put on flexible furlough, as we barely had any work coming in. On August 2nd, my boss asked to meet me in person (we had been working remotely for years) and I was told that the company would be made insolvent as they simply didn't have the money anymore. He told me I would be able to claim redundancy, notice pay and holiday pay through the government once the insolvency went through. There has also been an issue with my employer not paying my pension contributions for almost a year, despite taking them from my pay, so that's more money I'm supposed to be getting somehow.

He also said that he already started a new limited company, that way he could keep trading and working with our old clients (how this is even legal I don't know). I can see on Companies House that this company was incorportated on 14 July 2021, so before my redundancy. 

Anyway, I figured I would just have to wait to receive a reference number for the insolvency so I could claim my money. But weeks passed and nothing happened. Every time I asked him about it, he said they were still going through the paperwork. And me being naive, I believed it and just kept waiting. 

Then I found out that there is actually a time limit for me to try and claim my money, and that time limit is fast approaching. The old company is still listed as Active on Companies House. I have contacted ACAS and opened an Early Conciliation case with them, but nothing has actually happened with this and I don't feel like they are of any help.

The last message I got from my former employer was last month, where he said that he has some projects coming in and that once he gets the money for those he can pay the insolvency company. But I feel like he is simply delaying everything to the point where I can no longer make a claim (either through the Employment Tribunal or through the government for my redundancy pay). If he waits long enough, he won't have to pay for the insolvency as he'll be automatically struck off. Meaning I get absolutely nothing. 

Does anyone know what my rights are and what steps I should take now? I can't afford a lawyer as I am still unemployed, so I'm not sure what I should be doing. 
This has all put a very big strain on my (mental) health and my marriage, and I am honestly not sure what to do next.

Sorry for the long rant! 

General_Grant

ClaraSolis said:

Hey, I need some advice, as I'm really not sure on what to do. 

For 7 years I worked for a small company, basically as the only employee under my boss (apart from a few apprentices years ago). Because of the pandemic, I was put on flexible furlough, as we barely had any work coming in. On August 2nd, my boss asked to meet me in person (we had been working remotely for years) and I was told that the company would be made insolvent as they simply didn't have the money anymore. He told me I would be able to claim redundancy, notice pay and holiday pay through the government once the insolvency went through. There has also been an issue with my employer not paying my pension contributions for almost a year, despite taking them from my pay, so that's more money I'm supposed to be getting somehow.

He also said that he already started a new limited company, that way he could keep trading and working with our old clients (how this is even legal I don't know). I can see on Companies House that this company was incorportated on 14 July 2021, so before my redundancy. 

Anyway, I figured I would just have to wait to receive a reference number for the insolvency so I could claim my money. But weeks passed and nothing happened. Every time I asked him about it, he said they were still going through the paperwork. And me being naive, I believed it and just kept waiting. 

Then I found out that there is actually a time limit for me to try and claim my money, and that time limit is fast approaching. The old company is still listed as Active on Companies House. I have contacted ACAS and opened an Early Conciliation case with them, but nothing has actually happened with this and I don't feel like they are of any help.

The last message I got from my former employer was last month, where he said that he has some projects coming in and that once he gets the money for those he can pay the insolvency company. But I feel like he is simply delaying everything to the point where I can no longer make a claim (either through the Employment Tribunal or through the government for my redundancy pay). If he waits long enough, he won't have to pay for the insolvency as he'll be automatically struck off. Meaning I get absolutely nothing. 

Does anyone know what my rights are and what steps I should take now? I can't afford a lawyer as I am still unemployed, so I'm not sure what I should be doing. 
This has all put a very big strain on my (mental) health and my marriage, and I am honestly not sure what to do next.

Sorry for the long rant! 

What written notification (therefore proof) do you have of your redundancy?
Do you have all the payslips showing pension deductions which have not beern forwarded?

I would say starting a new company (often with a similar name to the original) in order to carry on trading through the new identity is a "phoenix".  

ClaraSolis

General_Grant said:

What written notification (therefore proof) do you have of your redundancy?

Do you have all the payslips showing pension deductions which have not beern forwarded?

I would say starting a new company (often with a similar name to the original) in order to carry on trading through the new identity is a "phoenix".  

I received a notice of termination of employment saying the following:

Further to our meeting today, I am writing to confirm the decision that your employment position has been made redundant due to XXX Ltd becoming insolvent.

The Company has explored ways in which your redundancy could be avoided and the possibility of alternative employment.

Sadly, this has not been successful and we have not been able to identify any way in which your redundancy could be avoided.

As a result of your redundancy the Company is terminating your employment with immediate effect.

You will receive pay in lieu of your contractual notice period.

You will receive pay in lieu of any accrued but unused holiday entitlement.

You will receive a statutory redundancy payment. This payment is based on your age, length of service and weekly pay. This payment will be free of income tax and National Insurance contributions.

As the Company has become insolvent, you can claim for outstanding payments from the Government when the insolvency is finalised.

I have all my payslips and my last P60 (I had to request them as I had not received them for at least a year). My pension contributions and my employer's are listed on there, but the money is not in my pension funds. I received many emails/letters from my pension provider saying funds were late and that they were reporting my employer to the Pension Regulator, but I guess nothing ever happened with that.

And yes, he's literally just started a new company (with a different name) and is getting contracts with old clients. He's also asked me if I can work for him on a freelance basis... I really need the money but I also don't want to work for someone who is so unfair and inconsiderate. I worked for him for 7 years and felt very unappreciated, only ever got one small payrise in all those years.

General_Grant

ClaraSolis said:

General_Grant said:

What written notification (therefore proof) do you have of your redundancy?

Do you have all the payslips showing pension deductions which have not beern forwarded?

I would say starting a new company (often with a similar name to the original) in order to carry on trading through the new identity is a "phoenix".  

I received a notice of termination of employment saying the following:

Further to our meeting today, I am writing to confirm the decision that your employment position has been made redundant due to XXX Ltd becoming insolvent.

The Company has explored ways in which your redundancy could be avoided and the possibility of alternative employment.

Sadly, this has not been successful and we have not been able to identify any way in which your redundancy could be avoided.

As a result of your redundancy the Company is terminating your employment with immediate effect.

You will receive pay in lieu of your contractual notice period.

You will receive pay in lieu of any accrued but unused holiday entitlement.

You will receive a statutory redundancy payment. This payment is based on your age, length of service and weekly pay. This payment will be free of income tax and National Insurance contributions.

As the Company has become insolvent, you can claim for outstanding payments from the Government when the insolvency is finalised.

I have all my payslips and my last P60 (I had to request them as I had not received them for at least a year). My pension contributions and my employer's are listed on there, but the money is not in my pension funds. I received many emails/letters from my pension provider saying funds were late and that they were reporting my employer to the Pension Regulator, but I guess nothing ever happened with that.

And yes, he's literally just started a new company (with a different name) and is getting contracts with old clients. He's also asked me if I can work for him on a freelance basis... I really need the money but I also don't want to work for someone who is so unfair and inconsiderate. I worked for him for 7 years and felt very unappreciated, only ever got one small payrise in all those years.

If you have worked out what the payment should be, I would suggest you write a "letter before action" addressed to the employing company requesting payment within, say, 10 days (not unreasonable given the length of time this has dragged on) from the date of the letter
At the moment, you are a creditor, ahead of some others, and should be dealt with by anyone actually dealing with an insolvency.

ClaraSolis

General_Grant said:

If you have worked out what the payment should be, I would suggest you write a "letter before action" addressed to the employing company requesting payment within, say, 10 days (not unreasonable given the length of time this has dragged on) from the date of the letter
At the moment, you are a creditor, ahead of some others, and should be dealt with by anyone actually dealing with an insolvency.

Thanks. I already sent them a letter outlining all the money I am owed after talking to ACAS (before starting Early Concilliation). Nothing happened with that. I don't even know if anyone is actually dealing with the insolvency or not, I have no contact details or anything.  

penners324

Companies house will show the details of the insolvency practioner.

ClaraSolis

penners324 said:

Companies house will show the details of the insolvency practioner.

Sadly there is nothing on there, they are still listed as Active. Which is what makes me think that he isn't actually going through the insolvency process, but instead waiting until the company gets struck off automatically so he doesn't have to pay. Is that possible? 

It's why I am not sure what I should be doing right now...

antonic

ClaraSolis said:

penners324 said:

Companies house will show the details of the insolvency practioner.

Sadly there is nothing on there, they are still listed as Active. Which is what makes me think that he isn't actually going through the insolvency process, but instead waiting until the company gets struck off automatically so he doesn't have to pay. Is that possible? 

It's why I am not sure what I should be doing right now...

If the Company has any HMRC debts, HMRC *can* object to the Compamy being struck off Companies House and so the Co will show on Companies House as Active - Prepared to Strike Off.
Does the Company owe anything to HMRC ?.

ClaraSolis

antonic said:

If the Company has any HMRC debts, HMRC *can* object to the Compamy being struck off Companies House and so the Co will show on Companies House as Active - Prepared to Strike Off.
Does the Company owe anything to HMRC ?.

I don't know if they owe anything to HMRC, they might do?
On Companies House they are listed as "Active — Active proposal to strike off" (from 6 July 2021), but then in the filing history it says "Compulsory strike-off action has been suspended" (from 5 August 2021). So I am not sure what exactly this means.

What it looks like right now is that I will run out of time (end of this month) and they get away with not paying me the money they owe me. 

General_Grant

ClaraSolis said:

antonic said:

If the Company has any HMRC debts, HMRC *can* object to the Compamy being struck off Companies House and so the Co will show on Companies House as Active - Prepared to Strike Off.
Does the Company owe anything to HMRC ?.

I don't know if they owe anything to HMRC, they might do?
On Companies House they are listed as "Active — Active proposal to strike off" (from 6 July 2021), but then in the filing history it says "Compulsory strike-off action has been suspended" (from 5 August 2021). So I am not sure what exactly this means.

What it looks like right now is that I will run out of time (end of this month) and they get away with not paying me the money they owe me. 

That's why I suggested writing a "letter before Action".
Any insolvency practitioner should have been given a list of creditors - and you are one - and should contact you.

ClaraSolis

General_Grant said:

ClaraSolis said:

antonic said:

If the Company has any HMRC debts, HMRC *can* object to the Compamy being struck off Companies House and so the Co will show on Companies House as Active - Prepared to Strike Off.
Does the Company owe anything to HMRC ?.

I don't know if they owe anything to HMRC, they might do?
On Companies House they are listed as "Active — Active proposal to strike off" (from 6 July 2021), but then in the filing history it says "Compulsory strike-off action has been suspended" (from 5 August 2021). So I am not sure what exactly this means.

What it looks like right now is that I will run out of time (end of this month) and they get away with not paying me the money they owe me. 

That's why I suggested writing a "letter before Action".
Any insolvency practitioner should have been given a list of creditors - and you are one - and should contact you.

I did write a letter telling them what they owed me and that I expected to receive this within 10 days or I would take further steps, sent it via email and signed for mail. All I got from them is that they are still working on the insolvency, which I think is a lie. So then I started Early Conciliation with ACAS and have a case with them, but nothing has happened through that either... 

I honestly don't think any insolvency practitioner is actually assigned to the company, because surely then I would've heard from them already? I asked my boss for contact details of the insolvency company and he never replied to that request.