Resignation whilst company in administration
Discussion
Hello All,
Wondering if anybody has any experience of the following?
The company I’m currently working for went into administration about three weeks ago. On day two of the administration the workforce was reduced from 30 to 12. The remaining 12 were kept on to help sell the company and generally keep things ticking over until a possible new owner arrived.
Whilst all this has been going on I have been lucky enough to secure a new job and have resigned this morning with a view to starting my new position as soon as possible. I have been advised today that I am still contractually obliged to work my three months notice and they are likely to hold me to this. Does this sound right? Seems incredibly unfair given the company is in administration. The 18 people who were made redundant got absolutely nothing from the company (Only gov statutory), so the employment contract was essentially worthless to them.
So in summary, am I’m stuck with the three months notice?
Thanks for reading.
Matt
Wondering if anybody has any experience of the following?
The company I’m currently working for went into administration about three weeks ago. On day two of the administration the workforce was reduced from 30 to 12. The remaining 12 were kept on to help sell the company and generally keep things ticking over until a possible new owner arrived.
Whilst all this has been going on I have been lucky enough to secure a new job and have resigned this morning with a view to starting my new position as soon as possible. I have been advised today that I am still contractually obliged to work my three months notice and they are likely to hold me to this. Does this sound right? Seems incredibly unfair given the company is in administration. The 18 people who were made redundant got absolutely nothing from the company (Only gov statutory), so the employment contract was essentially worthless to them.
So in summary, am I’m stuck with the three months notice?
Thanks for reading.
Matt
I don't what is right legally but I'd leave.
They can hardly force you to work and as for sueing you, they've got more important things to do.
I was at a large furniture co which went into adminstration last November.
A number of my colleagues were told that they were required to work but just walked out on the basis that they could be made redundant at any time. The adminstrators didn't bother chasing them.
They can hardly force you to work and as for sueing you, they've got more important things to do.
I was at a large furniture co which went into adminstration last November.
A number of my colleagues were told that they were required to work but just walked out on the basis that they could be made redundant at any time. The adminstrators didn't bother chasing them.
Edited by Vee on Tuesday 1st September 15:28
Matt K1064 said:
The 18 people who were made redundant got absolutely nothing from the company (Only gov statutory), so the employment contract was essentially worthless to them.
Did their contracts actually say they would get something other than statutory pay in the event of redundancy? If so, I'd assume you would be in a strong position to point to the company reneging on the terms of their contracts as a good reason to assume they've effectively cancelled yours.I have absolutely no grounds for this other than simple opinion, though! I'd recommend you pop in to your local CAB and ask them.
.
I have absolutely no grounds for this other than simple opinion, though! I'd recommend you pop in to your local CAB and ask them.Fair point. Contract does state that the employee's have a notice period ranging between 1 & 3 months - none of the 18 employees were given formal notice or payment in lieu of this.
Kermit power said:
Matt K1064 said:
The 18 people who were made redundant got absolutely nothing from the company (Only gov statutory), so the employment contract was essentially worthless to them.
Did their contracts actually say they would get something other than statutory pay in the event of redundancy? If so, I'd assume you would be in a strong position to point to the company reneging on the terms of their contracts as a good reason to assume they've effectively cancelled yours.I have absolutely no grounds for this other than simple opinion, though! I'd recommend you pop in to your local CAB and ask them.
I think your terms of employment are null void as you are no longer employed by the company just an administrator and as previously explained they have not hounored the contractual obligations of other employees laid out in there contracts. In theory they are denying your right to seek permnanent employment and even if they did try to sue you they wouldn't be in a very strong position, you could counter claim. best advice would be to go see the CAB or employment lawyer for a definitive answer.
First things first - put your employer (or administrator) on the spot - make them either accept a months notice or refuse it.
If they refuse and categorically state (in writing) that you must work 3 months then it's over to the CAB or an employment lawyer.
iirc when this happened to me I read that a notice period cannot be longer than you pay cycle, usually a month.
the reason you will rarely find anyone with experience of this kind of problem is that it rarely goes that far. It's not really in anyones interest to keep a demotivated employee.
If they refuse and categorically state (in writing) that you must work 3 months then it's over to the CAB or an employment lawyer.
iirc when this happened to me I read that a notice period cannot be longer than you pay cycle, usually a month.
the reason you will rarely find anyone with experience of this kind of problem is that it rarely goes that far. It's not really in anyones interest to keep a demotivated employee.
Bit of an update. Have spoken to a solicitor specialising in employment law and a an organisation called ACAS (free employment advice) both have confirmed that i'm stuck with working the three months notice if my employers (The administrators) want me to.
I have also been told today by the guy running the administration process that he has not accepted my resignation that I handed to him at the beginning of the week. His reasoning for this is that he has sold the company and by next week it will be in the hands of the new owners who will deal with the resignation. I'm thinking that he doesn't want to tell the new owners just in case it influences the sale in anyway.
Not really sure what to do now, going to keep a record of all the correspondence etc so I can prove to the new owners I have resigned, Don't want my departure delayed by a further week.
I have also been told today by the guy running the administration process that he has not accepted my resignation that I handed to him at the beginning of the week. His reasoning for this is that he has sold the company and by next week it will be in the hands of the new owners who will deal with the resignation. I'm thinking that he doesn't want to tell the new owners just in case it influences the sale in anyway.
Not really sure what to do now, going to keep a record of all the correspondence etc so I can prove to the new owners I have resigned, Don't want my departure delayed by a further week.
What a load of crap, your employment Lawyer & ACAS are being ultraconservative and following the letter of the law rather than giving constructive advice about what would happen in such a situation.
You must be massively valuable to your business for them to put you in such a negative poisition. You've been royally shafted by the current owners and I would make it clear to your new owners that you want to leave immeadiately. Give them the full run down
You've got two options either your professional and want to finish on good terms and be supportive of the new business, make it clear you'll want some kind of retention payment built into the notice period.
Or make it clear your not going to be busting a gut to help them with the new aquistion, they'll soon want you out.
You must be massively valuable to your business for them to put you in such a negative poisition. You've been royally shafted by the current owners and I would make it clear to your new owners that you want to leave immeadiately. Give them the full run down
You've got two options either your professional and want to finish on good terms and be supportive of the new business, make it clear you'll want some kind of retention payment built into the notice period.
Or make it clear your not going to be busting a gut to help them with the new aquistion, they'll soon want you out.
Well what they say is technically correct, and I can quite see where the administrators are coming from. Your choices are limited to
- working out your notice
- convincing the administrators to let you go early
- convince your new employers to wait a bit - and frankly if they are any good they will wait. After all, they'd be unhappy if the shoe was on the other foot and you were leaving them without working your notice.
- leave anyway and risk being sued for breach of contract (effectively, they can sue you for their direct losses which could include the cost of getting in a short-term contractor to fill your role. Which could be expensive).
What, however, they *can't* do is not accept your resignation. Assuming it was served correctly, which to be safe should be in writing and delivered in person, you are already working your notice no matter what they say.
- working out your notice
- convincing the administrators to let you go early
- convince your new employers to wait a bit - and frankly if they are any good they will wait. After all, they'd be unhappy if the shoe was on the other foot and you were leaving them without working your notice.
- leave anyway and risk being sued for breach of contract (effectively, they can sue you for their direct losses which could include the cost of getting in a short-term contractor to fill your role. Which could be expensive).
What, however, they *can't* do is not accept your resignation. Assuming it was served correctly, which to be safe should be in writing and delivered in person, you are already working your notice no matter what they say.
I'm very worried by all of this as no-one - including the experts- seems to understand the law
Yes - you have a contract with 3 months notice either way - but enforceability is another thing
As a result of the anti-slavery legislation ( William Wilberforce) it is against the law to make a person work against their will. They can't legally hold you to your notice period. As an employee it is a gentleman's agreement that works in your favour and can't be held against you
When I was young and stupid and teaching I had to give about 2 terms notice. So I walked in to see the head in mid November and said I'm off at Christmas - I've got a job with Unilever. He said - by your contract you have to work until Easter
Having received legal advice - I said to him - believe what you want - but my classroom will not have me in it after 1 January. He said some kind words at my leaving do on 15 December....
Yes - you have a contract with 3 months notice either way - but enforceability is another thing
As a result of the anti-slavery legislation ( William Wilberforce) it is against the law to make a person work against their will. They can't legally hold you to your notice period. As an employee it is a gentleman's agreement that works in your favour and can't be held against you
When I was young and stupid and teaching I had to give about 2 terms notice. So I walked in to see the head in mid November and said I'm off at Christmas - I've got a job with Unilever. He said - by your contract you have to work until Easter
Having received legal advice - I said to him - believe what you want - but my classroom will not have me in it after 1 January. He said some kind words at my leaving do on 15 December....
A company in administration is still the same company just as a company with new owners is the same company and so the contract of employment stands.
Whether or not the company stuck to the contract when dealing with other employees is an irrelevance, that is between them and those employees and not between them and you.
But meanwhile the administrator has no choice over whether you have resigned, if you have given notice in the correct way then you have resigned whatever they may think.
So if you have a contract of employment that says you must give three months notice then you must give three months notice. But it is a pretty foolish employer that will force you to do this, after all you won't be very productive and you may easily have to have some time off due to the stress of it all and they will end up paying you for nothing. I'd wait until the new owners take over and deal with them on it.
Whether or not the company stuck to the contract when dealing with other employees is an irrelevance, that is between them and those employees and not between them and you.
But meanwhile the administrator has no choice over whether you have resigned, if you have given notice in the correct way then you have resigned whatever they may think.
So if you have a contract of employment that says you must give three months notice then you must give three months notice. But it is a pretty foolish employer that will force you to do this, after all you won't be very productive and you may easily have to have some time off due to the stress of it all and they will end up paying you for nothing. I'd wait until the new owners take over and deal with them on it.
Jasper Gilder said:
Yes - you have a contract with 3 months notice either way - but enforceability is another thing
As a result of the anti-slavery legislation ( William Wilberforce) it is against the law to make a person work against their will. They can't legally hold you to your notice period.
Agree they can't actually force you to work, but it's entirely incorrect to extrapolate that to your notice period not being legally enforceable. If you refuse to perform your duties as set out in your contract then your employers are entirely within their rights to sue you for any consequential losses. Whether this is at all likely is of course a different matter.As a result of the anti-slavery legislation ( William Wilberforce) it is against the law to make a person work against their will. They can't legally hold you to your notice period.
Matt K1064 said:
Thanks for all the replies.
Quick update. Have a meeting with new owner tomorrow to discuss notice period. Could be interesting as they want to talk about what it would take to make me stay.
That would be at least £5k over what you have been offered at the other job I would have thought.... Quick update. Have a meeting with new owner tomorrow to discuss notice period. Could be interesting as they want to talk about what it would take to make me stay.
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