Liquidation, Redundancy and Immoral Employer!

[Bumble53]

Hi!

I wonder if I may be able to gain some advice around redundancy, although really its more a moral question about the immediate situation as we are resigned to knowing that my husband will be claiming statutory redundancy (he is entitled to 11 years). The situation is this.

My husband works for a small Ltd company which has one director.

The director went to see an insolvency specialist today and came back to the office and told my husband and one other employer that "on Friday you'll be redundant...I can't pay you, but you can claim it from the government" My first question is seek people's views on whether or not my husband (and his colleagues) should continue to go into work, when he has been told that he will not getting paid by his employer this month (he'll be owed wages from 1 December). He earns more than £700 per week so even if and when he can claim/does receive this from the government it won't cover his full wage anyway. It appears the expectation is that he and the rest of the staff (who have yet to be told) should continue to turn up for work each day having been told by the director he can't pay them. Or perhaps I should say "won't" pay them.... Last Friday there was money in the company account but instead of saving that for wages, the director decided to pay some suppliers, including the girl who does the Instagram account...(who is his wife's friend and with whom he socialises...). When he was questioned as to why he wouldn't save this money to pay his own staff he replied saying "oh we're owed a bit of money still so that will cover that". As I say, today he has basically said I won't be paying any of you, but you can still come to work this week please.

I understand that once in any form of administration he won't control the finances (and I'm slightly confused by the "it'll happen Friday" thing), but surely the moral thing to do here would be to ask his accounts person to make up the wages slips until 19 /20 December and pay as much of the sum owing to staff as he can? Or to have paid them up to last Friday at least knowing this was coming.

If my husband refuses to go into work does this jeopardise a redundancy in any way? He has nothing in writing yet..

The other thing I would mention is that the director has a debenture/charge over the company, so turns out he'll be first in line to get pretty much any and all monies that the company may receive following liquidation, and/or is raised by the sale of machinery etc (it's a joinery company). Meanwhile he is happy to let his loyal employees of many years go cap in hand to the government the week before Christmas... literally "I'm alright Jack" and this has been his attitude for months

Any thoughts or advice are welcome. Many thanks

[atticus]

Try to find out a little more. If the company is going into administration, there may be a chance the jobs can be saved. If liquidation, then that will not happen.

Also, if your husband walks out, then he will have ended his employment and will not have been made redundant. This may scupper his chances of a government funded redundancy payment.

[Bumble53]

Thank you that is helpful; as regards him not going to work then I suspected that might be the case; if he is unwell however, bearing in mind he can self certificate for 7 days..and doesn't get any sickness pay..

The company is definitely not going to be saved, the director/owner has said everyone will finish/ be made redundant on Friday

We had thought my husband could also claim his 3 months stat notice from the Governmenr (he's been at company almost 12 years) but I gather that if he gets another job, that will be offset against it; is that correct?

Thanks

[atticus]

ULA may be able to answer that question. But if it is right, it would make sense as the government safety net would not be needed for the full period.

[Bumble53]

Thank you; more than anything I am just so cross with the way the director has/is handling it; whether the business could have been more profitable/saved if he had taken more interest in wanting to achieve this is another matter; he really isn't interested, doesn't need the money (as he keeps reminding everyone). The fact that his (very loyal) employees need their wages to pay their mortgages and support, in some cases their young families, seems completely lost on him; quite frankly his attitude is quite clearly that he doesn't give a t*ss. It's a bad enough situation at any time, but the week before Christmas? The guy is amoral as far I'm concerned

[ULA]

If your husband's employer is insolvent he can claim some of the money owed to him from the Redundancy Payments Service - this is the government service. He can claim:

* up to 8 weeks’ unpaid wages
* pay for annual leave - including annual leave owed but not taken
* statutory notice pay
* any statutory redundancy pay that may be due

An insolvency practitioner should contact your husband, who will give him a case reference number called a "CN number". He needs to use this number to claim the money owed by the employer. Usually the money is paid within 6 weeks of applying.

If statutory notice is not paid he will need to make a second claim for it. The insolvency practitioner will give him another case reference number called an "LN number", however this will not be provided until after his notice period should have ended. When completing this he will need to provide information about any benefits he was entitled to during the notice period, even if he does not claim them and any income earned during what would have been the notice period e.g. from temporary or a new permanent job. These sums will be deducted from any payment as well as tax and national insurance.

[Bumble53]

Thank you. Could I ask a question about the process.

At the current time my husband has been told by the director that the company is going into administration and he will be redundant from Friday. The director has now under some pressure told the rest of the staff and they are all being sent home today.

My question is that my husband (along with the rest of the staff) have not been formally made redundant by an Administrator and they have nothing in writing, either from the company or the administrator. Shouldn't the company be waiting for the Administrator to formally make the staff redundant and provide them with the RP1 and the CN number? I read that staff dismissed in the first 14 days of Administration are not seen as preferred creditors and have less rights than those made redundant after 14 days. My understanding is that this will not impact a claim to the RPS, but can I ask if there is any risk to the employees given that they have not yet had any communication from the Administrators, and are essentially walking away with no formal confirmation or communication regarding redundancy?

Many thanks

[ULA]

Is the company going into administration or being liquidated? Ultimately either situation will allow your husband the right to claim however, there is a difference in the immediate process for dealing with the staff.

[Bumble53]

Thank you . As we understand it, Administrators have been appointed and are putting the company straight into liquidation as there is no option to save it. A firm of Insolvency Practitioners has been instructed, they are called Begbies Traynor. He has now been told that he has an to go back into work on Friday morning to meet with them, so it should become clearer at that point.

[atticus]

Your husband should ask whether there is any chance that any part of the business can be rescued, and with it any jobs.

[Bumble53]

That question has been asked and answered. As it turns out he has already been offered more than one job from competitors so the job loss in and off itself is not now the primary concern; but he does want to ensure that he receive the statutory redundancy to which he is entitled.

[Bumble53]

Hello again; so it turns out the company owner has not even been honest about the "administration". He led the employees to believe that the "administrators" were placing the company into liquidation. That is not the case; he has placed the company into voluntary liquidation. ULA you mentioned that there was a different process for employees in these circumstances? Are you able to tell me what they are? Currently my husband has nothing in writing at all confirming any redundancy; he hasn't been given an RP1 or CN number - the liquidators say this "will follow" when the company ceases to exist on 16 January. But my husband has been redundant today with no proof or evidence of this. I feel that something is not quite right here in terms of employees rights. Would you be able to advise at all?

Many thanks

[atticus]

Voluntary liquidation is liquidation. It is liquidation initiated by the company's directors recognising the company's financial position, rather than by a creditor taking court action to put the company in liquidation.

[Bumble53]

Yes I understand that. What i don't understand is what process the employer should be following. If my husband or any of the other employees wanted to start claiming benefits for example, currently they have no proof whatsoever that they've even been made redundant. Surely normal practice would be for his employer to have at least given them letters explaining that they have been made redundant and why

[ULA]

In voluntary liquidation: employment contracts may not be affected. However, the liquidator may make redundancies if they believe it is best for the company.