Not being paid by employer

[FuelCellRulz]

Hello,

I work for an SME which currently relies on external investor funding the company. Due to the companies poor financial position (as funding for the next year has not been secured) management sent an email two weeks ago stating that a portion of June's salaries will be paid but there is not enough for July as of yet. Since then any emails asking for updates or clarifications have gone ignored and when asking in person the questions are brushed aside.
I was hoping to understand what he best course of action would be to take with any external agencies? And also was wondering what would happen to back dated pay if the company was to go into liquidation.

Thanks for any help.

[ULA]

If this is a one off or short-term failure to pay your salary it is a breach of contract, although it is not normally serious enough to entitle you to resign and claim constructive dismissal. There is, though, an express or implied term in every contract of employment that your employer will pay your salary, and a persistent failure to comply with this obligation would indeed entitle you to resign and claim constructive dismissal and a breach of contract.

Alternatively, you may bring a claim in the employment tribunal for "unlawful deductions from wages" which is often quicker and you can still be employed while making a claim. Any claim to the employment tribunal must be made within three months less one day of the breach, but you could choose to make the breach of contract claim in the county court (although there is a cost implication to you of doing so which there is not at the employment tribunal) in which case you have six years to do so.

If the company goes into administration then after two weeks the administrator may take on your employment rights, and if the business is sold your contract of employment may be transferred across to any new owners.

If your employer becomes insolvent, you become a "preferential creditor" in respect of salary due for the four-month period immediately preceding the insolvency, although there are limits on the amount that can be paid on this basis. You are also entitled to be treated as a preferred creditor for accrued holiday pay and certain occupational pension payments. If you still find there are insufficient funds to pay you then you may be able to be reimburses part or all of your outstanding salary out of the national insurance fund (NIF). The Insolvency Service's Redundancy payments offices will deal with these claims, but again payments are capped.