Employer entering liquidation - Where do I stand

Liam2594

Hi everyone,

After some advice, please. 

I have been employed by my company for almost four years, unfortunately it has now entered a liquidation process due to debts and market conditions not being as strong in the industry as they have been. I understand this is difficult for everyone involved including directors who have been forced to make the decision.

I'm trying to work out what I'll be entitled to, but it seems to be a bit of a minefield as to what you can claim for and how these things work.

As I understand, I will be entitled to three weeks redundancy pay (capped at £719 per week) from the redundancy service provided by the government. I will be entitled to my untaken holiday pay, I think? I have received part payment of my wages due at the end of May, but there is still a decent amount outstanding. 

The other question confusing me, is around the notice period. The position I held carried a three month notice period, but reading online it would appear that I'm only entitled to statutory notice which is one week for every full year worked (again three weeks). 

Officially I believe we are all still 'employed' as such as we haven't been given claim reference numbers yet, although our details have now been passed to the liquidators. 

Any advice gratefully welcomed.

Hoenir

The liquidators will inform you of your rights in due course. 

Your rights if your employer is insolvent

https://www.gov.uk/your-rights-if-your-employer-is-insolvent/what-you-can-get

Liam2594

The liquidators have now sent everyone a letter with claims forms which they've calculated, however, this doesn't include the notice period pay, and doesn't include pay up to now. No one has said to us we're redundant up to this point (three weeks later), we were just told an insolvency practitioner would be appointed and not to return to work.

Marcon

Liam2594 said:

The liquidators have now sent everyone a letter with claims forms which they've calculated, however, this doesn't include the notice period pay, and doesn't include pay up to now. No one has said to us we're redundant up to this point (three weeks later), we were just told an insolvency practitioner would be appointed and not to return to work.

There will be contact details on the letter, so don't be afraid to ask any questions about what's happening and what you can expect in the near future - BUT bear in mind that the liquidators themselves may not know. If they are trying to sell the business as a going concern, it may yet be that some, if not all, the employees may have ongoing jobs.

Liam2594

I have now contacted the insolvency practitioner direct who has been helpful. The only issue I’m confused over and no one seems to be able to answer is, as we’re officially still employed as we haven’t been told any different is whether we get paid up until we’re confirmed redundant or our last day in the office. 

MeteredOut

Liam2594 said:

I have now contacted the insolvency practitioner direct who has been helpful. The only issue I’m confused over and no one seems to be able to answer is, as we’re officially still employed as we haven’t been told any different is whether we get paid up until we’re confirmed redundant or our last day in the office. 

The answer could be (and I suspect likely to be) neither, if the company/liquidator has no money to pay your wages after all secure creditors have been paid (eg, HMRC)

Liam2594

I certainly agree that outcome is most likely, obviously we will have to claim from the RPS as I understand it for a certain amount of unpaid wages. If that’s the case, although I know limited per week, the pay up until redundancy should be included by my understanding, although I could be understanding it incorrectly. 

MatyMoo

At the point you were told an insolvency practitioner had been appointed and not to return to work you ceased to be employed by the company and they were unable to fulfil their contracts - employment or otherwise. At this point I would have been out there looking for a new job to mitigate any period of no income!

You could claim your unpaid wages, holiday pay, redundancy pay via the insolvency but you would be an unsecured creditor and if the company has no or limited funds to distribute you are unlikely to get all of your money back - you might get a percentage. 

That’s why there is a government scheme to pay you your statutory redundancy. I would take that and pray that some of the rest comes back as a payout to unsecured creditors. 

Hoenir

It will take some time for the liquidator to ascertain the precise final financial position of the company.