Been made redundant and employer is saying they can't afford to pay my redundancy

theheronsnest

Hi,

I was made redundant last year, and my employer delayed my redundancy payment until the end of my notice period which was February. Less than 24 hours before payday, my employer emailed everyone who had been made redundant and said they simply cannot afford to pay us and would try their best to pay us if they get some money.

The company is still trading!! Working every day, posting on LinkedIn like nothing has happened.

I have spoken to ACAS and followed the process through early conciliation and am now waiting to go to employment tribunal, but that's not until October. The thing that frustrates me the most is that they are still in business and carrying on like they don't owe thousands of pounds - is this not illegal?

The company has (on two occasions now) sent me a random £500. If they continue to do this in their own time, and pay off the outstanding debt, will my case still be heard in court or will they be square? It doesn't seem fair that I'm having to wait for this money on their terms. I am legally owed this money, and if they cannot pay it, I was under the impression they need to go into administration or insolvency. There are about 20 other people who have been made redundant I believe.

What are my rights? What should I do? Can I report them to anyone? Help please!

Marcon

theheronsnest said:

Hi,

I was made redundant last year, and my employer delayed my redundancy payment until the end of my notice period which was February. Less than 24 hours before payday, my employer emailed everyone who had been made redundant and said they simply cannot afford to pay us and would try their best to pay us if they get some money.

The company is still trading!! Working every day, posting on LinkedIn like nothing has happened.

I have spoken to ACAS and followed the process through early conciliation and am now waiting to go to employment tribunal, but that's not until October. The thing that frustrates me the most is that they are still in business and carrying on like they don't owe thousands of pounds - is this not illegal?

The company has (on two occasions now) sent me a random £500. If they continue to do this in their own time, and pay off the outstanding debt, will my case still be heard in court or will they be square? It doesn't seem fair that I'm having to wait for this money on their terms. I am legally owed this money, and if they cannot pay it, I was under the impression they need to go into administration or insolvency. There are about 20 other people who have been made redundant I believe.

What are my rights? What should I do? Can I report them to anyone? Help please!

If a company is trading while the directors know, or should have known, that it is insolvent, then they may become personally liable for any debts.

But they may not be insolvent - it could be a cashflow issue, in which case they will be keen to present a 'business as usual' face to the outside world.

Is it fair that you are having to wait? No, of course not. I suggest you have a word with Citizens Advice to talk through any actions you might consider taking.

theheronsnest

Hiya Marcon,

It is a cash flow issue. They’ve said that. However they’ve paid 2 employees in full.

Is he breaking any laws here? Can he do this? 

Marcon

theheronsnest said:

Hiya Marcon,

It is a cash flow issue. They’ve said that. However they’ve paid 2 employees in full.

Is he breaking any laws here? Can he do this? 

Any idea why they've paid 2 employees in full - and are you sure they have? Grapevines are notorious for generating inaccuracies, and sometimes a bit of stirring from others on the same vine!

Can 'he' do it? Well, he is, so yes! Based on what you've said in your posts here, there is no criminal activity going on. You could stir things up by posting publicly on LinkedIn, but however mad you may feel (and in your shoes I'd be pretty annoyed too), doing that could seriously damage the company. That outcome may look attractive right now, but (a) it could further delay payment of your redundancy if you end up claiming from the state fund and (b) if you were a current employee and lost your job because someone did that, how would you feel?

As previously suggested, have a word with Citizens Advice, and give them the full facts of which you are certain, including the amount outstanding. They will be able to tell you your options.

mark_cycling00

Do you mean statutory redundancy pay or an enhanced payment from them?

ACG

They should not prioritising who they pay, it should be all equal - and that goes for all creditors not just staff/ex staff. 

They should not be trading if they are insolvent. 

However, I think you need to consider how you play it. You want your money of course you do. But if they close the business down and get an insolvency practitioner (IP) in, all of the assets will be sold. Guess who gets paid first (and probably charges a fortune)... The IP. 

You are more likely to see your money with your ex employers doing what they are doing. 

You could send them a letter before action and take them to court, it will take about 2 months and cost you a bit of money (google MCOL). But if they pull the plug on the business, you are unlikely to see your money so just think about how you want to play it.

penners324

Start legal action against them through money claim online

theheronsnest

mark_cycling00 said:

Do you mean statutory redundancy pay or an enhanced payment from them?

Statutory!

theheronsnest

Marcon said:

theheronsnest said:

Hiya Marcon,

It is a cash flow issue. They’ve said that. However they’ve paid 2 employees in full.

Is he breaking any laws here? Can he do this? 

Any idea why they've paid 2 employees in full - and are you sure they have? Grapevines are notorious for generating inaccuracies, and sometimes a bit of stirring from others on the same vine!

Can 'he' do it? Well, he is, so yes! Based on what you've said in your posts here, there is no criminal activity going on. You could stir things up by posting publicly on LinkedIn, but however mad you may feel (and in your shoes I'd be pretty annoyed too), doing that could seriously damage the company. That outcome may look attractive right now, but (a) it could further delay payment of your redundancy if you end up claiming from the state fund and (b) if you were a current employee and lost your job because someone did that, how would you feel?

As previously suggested, have a word with Citizens Advice, and give them the full facts of which you are certain, including the amount outstanding. They will be able to tell you your options.

Thanks so much for your help. I will speak to Citizens Advice! 

He definitely has paid the other 2 employees in full - he admitted it himself on the phone to me.