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Company closed, will I get my redundancy?


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I was recently made redundant as the company is in financial difficulty. The director is completely dodgy having rolled the company a few times to get rid of debt and not pay his creditors.

 

I have been offered the correct redundancy payment of 3 months as worked there for 2 years, they also promised me a payment of 3 weeks gross pay.

 

I have received a letter stating these payments will be made as my monthly salary with the final payment having the extra included.

 

I have been advised by the ops manager that the director is planning to roll the company again soon.

I now have a new job to start but won't be able to let them have my P45 as I won't receive this until I get my last pay.

I have emailed him to ask if he could pay in a lump sum to avoid me being taxed on a 2nd job but he has said he doesn't have the money and he will stick to the monthly payments.

 

If he closes the company will I still be entitled to my redundancy?

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short answer, yes. If he shuts up shop you will be first in line for a payout and as a director he may well be personally liable and certainly wont be able to use any of the assets of the business (by selling them to himself as another company) as your statutory notice is already given. However, of course many crooks dont always do as they are supposed to so you may well be chasing him for the money but he wont be able to avoid paying of he does phoenix the business with the oldco assets as said but that may require you suing him personally and showing the court the assets were transferred unlawfully.

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short answer, yes. If he shuts up shop you will be first in line for a payout and as a director he may well be personally liable and certainly wont be able to use any of the assets of the business (by selling them to himself as another company) as your statutory notice is already given. However, of course many crooks dont always do as they are supposed to so you may well be chasing him for the money but he wont be able to avoid paying of he does phoenix the business with the oldco assets as said but that may require you suing him personally and showing the court the assets were transferred unlawfully.

 

Whilst this may be theoretically true, if the director has experience of this, he is probably more than aware of how to phoenix a company legally whilst leaving all creditors including employees behind. It isn't that hard. So all suing him personally may not be an option at all. I am afraid that altogether too many people get away with this quite legally.

 

If that happens, as it usually does, the route is to claim against the Redundancy Payments Service, the government scheme set up to support workers whose employers have gone bust. They do have limits on what they will pay, but it is better than nothing, which is the alternative.

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Thanks for you replies

 

I spoke to ACAS who said about starting an Early Conciliation wihich I told him about then thought if I do that he may as well go bankrupt and I won't get anything. I know he's already sold his house and is living in his mother's flat who has recently died so he has no assets himself, therefore nothing really to lose.

 

I will be royally screwed if he just decides not to pay me. Having worked in his finance department, I know how fickle his payment promises are.

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Thanks for you replies

 

I spoke to ACAS who said about starting an Early Conciliation wihich I told him about then thought if I do that he may as well go bankrupt and I won't get anything. I know he's already sold his house and is living in his mother's flat who has recently died so he has no assets himself, therefore nothing really to lose.

 

I will be royally screwed if he just decides not to pay me. Having worked in his finance department, I know how fickle his payment promises are.

 

What on earth are ACAS talking about? You can't start an early conciliation BEFORE somebody does something in case they do it!

 

If you aren't paid, then you go to the Redundancy Payments Service, like I said.

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  • 1 month later...

Hi all

 

I was made redundant from my Finance Manager post back in March with a weeks warning.

I was promised 3 months pay in lieu for redundancy and 3 weeks gross pay by way of a 'sorry' for everything I had been through which included having to fund the company by using my own personal credit card and watching the owner of the business lie to his factoring company in order to have available funds to draw down.

 

The owner is a fly by night, always robbing Peter to pay Paul and never sticking to payment promises or commitments I would set up.

 

Just before I left we had received a winding up order from HMRC as he owed over £120k for non payment of PAYE

The owner of the business is looking to emigrate to Australia shortly as his wife and children moved there in February. He has sold his house and is currently living in his mothers flat, so he has no assets.

 

In my redundancy letter it was stated that I would receive my redundancy monthly (as paid with salaries) meaning I would be paid April, May, June and the 3 weeks gross pay would be included in my final pay.

 

I have this morning been informed that the company is now trading under a different name meaning he has closed the company.

I have checked Companies House and the new company was set up in February this year and the proprietors name is the name of my old boss' friend whom he used to borrow money from.

 

My worry is that my previous employer still owes me nearly £3.5k which is 1 months pay + 3 weeks gross pay

Do I have a leg to stand on if the company has gone into liquidation?

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I've discovered today that he has in fact closed the company and is now trading under a new name (having checked Companies House, it's his friend who has set up the new company)

 

I received 2 payments from the company so far, I have 1 months salary still due + the 3 weeks gross pay......

 

If I had the money to put a bet that I won't get it... I'd put it on!

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Am no expert on this but i believe if salary cannot be paid after the company is wound up you will receive statutory redundancy pay from the government

 

https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwiL8PiH5_bTAhWhKsAKHdKkBw4QFggzMAE&url=https%3A%2F%2Fwww.gov.uk%2Fclaim-redundancy&usg=AFQjCNEh6VheVqnJ_xsvAdPPQS5ispTEhw

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How much notice were you supposed to be given?.

How much redundancy were you due had you been given notice or Pay In Lieu Of Notice (PILON)

 

Work out how much that should have been.

Then look at the scheme you were paid under and check if that allows you statutory redundancy pay from the government (& don't count on getting the "3 weeks money".)

 

Then consider you could argue the monthly payments were PILON, if it then means you could be out of pocket less by legitimately claiming the full redundancy sum from the government scheme.

 

Alternatively, if you have to treat those monthly payments as your redundancy money (redundancy is usually paid in one lump sum?), if you were due PILON try and claim that from the government scheme.

 

https://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you

 

Did you get payslips / documentation for those monthly payments?

Was taxed owed on them? Was it deducted?

(Redundancy pay up to £30k is tax free but PILON / holiday pay is taxable).

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Having worked there 2 years I was supposed to be given 3 months notice so 3 months pay in lieu of notice

 

508414245423606631

 

I have attached my letter I received which was dated 8/3/17 I received it by email on 17/3/17 and had actually already left on the 10th March

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If you cant see the letter it says :

 

Your length of service entitles you to 3 month's notice which will be paid on normal salary dates of the last Friday of each month.

 

As your continuous service with the company is less than the 2 years necessary to attract a Statutory Redundancy payment you would not be entitled to any redundancy pay on termination of your employment, however as a gesture of goodwill we will pay you 3 weeks salary at the end of June in addition to your final pay salary.

March Pay - 31st March

April Pay - 28th April

May Pay - 26th May

Salary for June plus 3 weeks pay to be paid 30th June which will include P45

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You were talking about redundancy payment, but that letter refers to PILON and says you aren't eligible for statutory redundancy .....

 

I think you'll be able to claim the last month's PILON, but not any statutory redundancy pay, unless they are wrong about your length of continuous service. What would your length of continuous service be at the END of the notice period?

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At the end of the notice period I would have passed the 2 years service. I started 13/4/15

I received notice in March so was only 1 month before my 2 years service

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that seems more than they are required to do so perfectly OK. The fact they dont understand that notice period is part of your employment period for redundancy purposes is not important as they are paying you 3 weeks.

Dont forget to take any holiday you have accumulated. If you dotn there may well be another row erupting so make sure you do take it, even if it is in the last 3 weeks of june

If you cant see the letter it says :

 

Your length of service entitles you to 3 month's notice which will be paid on normal salary dates of the last Friday of each month.

 

As your continuous service with the company is less than the 2 years necessary to attract a Statutory Redundancy payment you would not be entitled to any redundancy pay on termination of your employment, however as a gesture of goodwill we will pay you 3 weeks salary at the end of June in addition to your final pay salary.

March Pay - 31st March

April Pay - 28th April

May Pay - 26th May

Salary for June plus 3 weeks pay to be paid 30th June which will include P45

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I would argue you are entitled to:

Taxable :

3 months notice / PILON

Any holiday pay.

 

Non-taxable : 2 weeks pay (redundancy), and can claim any of these from the statutory scheme if the employer doesn't pay them.

 

The 3rd weeks pay (as redundancy) you may have to accept has been lost, or that you may get only a fraction for it from the insolvent company.

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Thanks all

 

So will they have to Tupe me over to the new company to pay me under that now? All seems a bit of a fiddle if you ask me!

I did request a lump sum but was told that I knew how bad the finances were and therefore should know this wouldn't be possible.

The thing is I DO know him very well and do not trust him in the slightest!

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No. Don't accept anything from the new company (one has to wonder why you'd touch any company connected with Mr Duck n Dive ......)

 

You get what you are owed from the (insolvent?) company or, if insolvent, the government statutory scheme I posted the link to, above.

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Hi again

 

I have been told today by the former Operations Manager (now titled Operations Director) that as the company has gone into administration I will need to apply to HMRC for any loss of earnings and redundancy.

I am in full time employment now and therefore have not incurred any loss of earnings but the company still owes me 1 month salary (PILON) and 3 weeks redundancy as promised in writing.

 

I am in contact with another member of staff who has also received 3 months notice. She has another job to start but wanted to know if she could leave straight away and whether she would get paid. I told her to ask the Ops Director for her notice in writing which she hadn't got. She has the exact same letter that I was given stating she would be paid in lieu of notice at the end of each month.

I told her that was exactly what they had said to me but was now saying that I would need to apply to HMRC so she queried whether this would be the case for her and was told that everything that was promised under the former company still stands as all staff have been tupe'd across

 

Is this right? Are they allowed legally to not pay me even though I am still technically employed?!

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Hi again

 

I have been told today by the former Operations Manager (now titled Operations Director) that as the company has gone into administration I will need to apply to HMRC for any loss of earnings and redundancy.

I am in full time employment now and therefore have not incurred any loss of earnings but the company still owes me 1 month salary (PILON) and 3 weeks redundancy as promised in writing.

 

I am in contact with another member of staff who has also received 3 months notice. She has another job to start but wanted to know if she could leave straight away and whether she would get paid. I told her to ask the Ops Director for her notice in writing which she hadn't got. She has the exact same letter that I was given stating she would be paid in lieu of notice at the end of each month.

I told her that was exactly what they had said to me but was now saying that I would need to apply to HMRC so she queried whether this would be the case for her and was told that everything that was promised under the former company still stands as all staff have been tupe'd across

 

Is this right? Are they allowed legally to not pay me even though I am still technically employed?!

 

If TUPE'd across : let the new company pay (your colleague).

If not TUPE'd across, claim from the statutory scheme. You'd be able to try to claim the remaining PILON (but probably wouldn't succeed - see below!) but not the discretionary redundancy payment, unless (from length of service) it wasn't discretionary, but statutory .....

 

Then again, this is pretty much what I said in post #13, on the 17th May .....

 

You were talking about redundancy payment, but that letter refers to PILON and says you aren't eligible for statutory redundancy .....

 

I think you'll be able to claim the last month's PILON, but not any statutory redundancy pay, unless they are wrong about your length of continuous service.

 

Checking the statutory scheme, you can claim for statutory PILON (so 4 weeks pay, and you've had more than that already) and statutory redundancy if you are correct that you'd been continuously employed for more than 2 years and them saying you hadn't reached 2 years service is wrong.

 

The fact that they offered you 3 months PILON doesn't mean you can claim 3 months PILON from that statutory scheme, only the statutory sum.

 

Statutory redundancy is based on your age for each full year you worked, so 2 years by:

 

  • 0.5 week’s pay for each full year worked when you’re under 22
  • 1 week’s pay for each full year worked when you’re between 22 and 41
  • 1.5 week’s pay for each full year worked when you’re 41 or older

meaning you'd get between 1 weeks and 3 weeks pay as statutory redundancy pay from the government scheme, if you did have more than 2 years continuous service (but not 3 years).

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Update:

 

I never received my pay and even though I emailed the previous MD I got no response.

I have had 2 emails this morning, 1 from the company's pension company saying I have been enrolled under the new company name and 1 from the previous MD saying he and the Ops Director are now both on holiday and he has chased the liquidators for an answer as he is aware the end of the month is 3 days away and has given me their direct details.

 

I spoke to ACAS on Friday who told me to look for a clause in my contract regarding PILON but there is none. It merely states either party should give 3 months notice. She did say that if that is the case I could apply for a tribunal as the payment is nothing but that, my notice. I am so flaming confused with all this!

 

What really riles me is that he knew full well what he was going to do. The guy is SO dodgy and this is the 3rd time that I know of that he's closed down and re-opened to escape his debts. He just ****s on anyone and everyone and always comes out the end smelling like roses.

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Update:

 

I never received my pay and even though I emailed the previous MD I got no response.

I have had 2 emails this morning, 1 from the company's pension company saying I have been enrolled under the new company name and 1 from the previous MD saying he and the Ops Director are now both on holiday and he has chased the liquidators for an answer as he is aware the end of the month is 3 days away and has given me their direct details.

 

I spoke to ACAS on Friday who told me to look for a clause in my contract regarding PILON but there is none. It merely states either party should give 3 months notice. She did say that if that is the case I could apply for a tribunal as the payment is nothing but that, my notice. I am so flaming confused with all this!

 

What really riles me is that he knew full well what he was going to do. The guy is SO dodgy and this is the 3rd time that I know of that he's closed down and re-opened to escape his debts. He just ****s on anyone and everyone and always comes out the end smelling like roses.

 

1) What has ACAS got to do with it?. Either you are TUPE'd to the new company or you go to the government scheme dealing with statutory payments from insolvent companies.

You've been advised of this earlier in the thread .....

 

2) What else were you expecting of him?. You were the Finance Manager for his company, and you knew his history of doing the same, so why did you expect him to act any differently?.

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