Employer gone insolvent !

[tom a]

I'm after some advice regarding my wifes ex employer. My wife worked in a small shop where 7 people were employed mainly on part time hours.

She worked 27 hours a week and was employed there for 12 months.

She found a new job and handed in her resignation. She worked a weeks notice.

 

On the evening of her last day the boss called them all in to work and told them she was closing the shop and she had gone into receivership.

Wages were paid monthly and she is owed just short of £700.

She has sent off a RP1 form and is still waiting to hear from The Insolvency Service.

 

The question we have is what are the chances of getting any of her owed wages?

 

The thing that really p's me off is the boss and her family just got back from a fortnights holiday in Barbados but can't afford to pay her staff wages.

 

Thanks in advance for all replies.

[elche]

As long as the employment contract was legal, a very good chance.

 

I have never heard of the National Insurance Fund not paying out, and wages are covered (subject to a maximum sum):

 

Your rights if your employer is insolvent : Directgov - Employment

 

Che

[tom a]

Thanks for your prompt reply elche.

Just asked the wife and she tells me she never had a contract of employment.

[Hacked_Off]

i had this when kwik save went down the toilet. they owed me 3 years redunancy , no notice pay, and two months wages. altogether i got 600 odd which was no were near the amount i was owed and it took four months of phone calls, letters and e mails. sorry your wife is in the same situation.

[BeauBrummie]

Just a little pointer for your wife tom a,

 

It will be very beneficial to her if she were able to find out from her ex employer who the insolvency practitioner is and then contact them to ensure that everything is running smoothly.

 

In my experience it is not The Insolvency Service that is the problem it would be that the employer/insolvency practitioner not giving the right info.

 

Beau

[tom a]

Thanks for that Beau.

She took the RP1 form direct to the Insolvency Practioners office.

They said they would forward it to The Insolvency Service.

Will get her to give them a call tomorrow.

[elche]

In my experience it is not The Insolvency Service that is the problem it would be that the employer/insolvency practitioner not giving the right info.

 

No doubt you will initially have to see if there are sufficient funds to meet liabilities such as unpaid wages initially with the IP, I was merely pointing out that the whole procedure, is in theory 'underwritten' by the NIF, in situations where, "... all the debts can(not) be met in full ... there are special arrangements to ensure that you receive a basic minimum of the debts owed from the National Insurance Fund."; and this would, subject to a maximum cap, include unpaid wages.

 

Thus whether you receive unpaid wages from assets realized during the insolvency, or from the NIF, you should receive them.

 

Che

[tom a]

Just an update.

After lots of phone calls my wife finally got paid out yesterday.

Her monthly earnings owed was £586 but she only got paid £494 after tax and N.I. deductions.

Will ring them on Tuesday to find out why she was nearly £100 short.

Any ideas ?

[gezwee]

Hi Tom

 

Che will probably know more than most on this subject but I'd be inclined to think it would have been source deductions.

 

Possibly notional tax rate was applied with 0 allowance, was your better half given a full break down of deductions?

 

Gez

[elche]

Just dealing with this issue yesterday at work, and looking at a payout that a client received from the Insolvency Service, this is what their form says on the back:

Why have you taken tax and national insurance off my holiday pay and wages owed?

 

lf your former employer had made these payments they would have been subject to tax and

national insurance By law,we have to treat them the same way.We are not a tax office or an

employer and we always deduct basic rate tax and national insurance contributions even if your

earnings and circumstances mean that you do not pay income tax or national insurance.

 

Maybe this explains it - my work does not extend to tax issues, so I don;t know the answer, and you should take it up with the RPO dealing with your payout, if you feel it is wrong.

 

Che

[gezwee]

Had a look on some of my old notes but can't find the rel section regarding notional tax rate (there is one, even if my old eyes can't see it)

 

Would definitely ask the RPO for further info but I calculate the following:

 

Assuming basic annual allowance of £6475.00

 

27 x 4 x £5.73 (nat min wage) = £618.84 monthly

 

Tax due: £15.83

N.I: £15.68

 

Net: £587.33

 

Assuming £00.00 allowance:

 

Tax due: £123.76

N.I: £15.68

 

Net: £479.40

 

This is a guesstimate on allowance but hopefully you'll see from this where the additional has possibly gone.

 

RPO's are under a lot of pressure at the moment, stay calm and polite on the phone and I'm sure you'll get the answers you need in the end.

 

Gez

[tom a]

Thanks for the replies.

Basic wages owed according to RPO was £494. Sorry my mistake on post 8.

After deductions she received £390.

According to our calculations she should have had 111 hours X £5.73 ph = £636.03 less £50 sub received = £586.03.

Will let you know the outcome after speaking to them on Tuesday.

[BeauBrummie]

Sorry to throw a spanner in here but it could be a good spanner!!

 

Have you considered the Holiday pay that had been accrued but not paid?

 

This perhaps should have been considered in the original calculations, but if your wife is entitled to it why not ask?

 

Beau

[tom a]

Never thought about holiday pay. Will ask the question tomorrow.

Thanks.

[tom a]

Been in touch with RPO today and there's some confusion over hours worked.

My wife worked 111 hours in the month but as only been paid for 95 hours.This is where the discrepancy comes from.

We are trying to get the local insolvency service to sort it out but we've been struggling a bit today. Will try again tomorrow.