Employer in Administration - What Happens?
Discussion
Hi
Found out that my wife's employer has gone into administration.
They have appointed administrators to sell off / salvage / close down or whatever they do, but we're more concerned with things closer to home.
Basically what happens next?
They’ve already been told that they won’t be paid from 1st – 10th March, but there should be some money to pay them at some point for the rest of March.
The staff have all been told to carry on as normal as otherwise they won’t be able to sell the company as a going concern …
I think the whole thing stinks, but obviously we’ve got a mortgage to pay and want to know what they can legally do with non paying of salaries.
Found out that my wife's employer has gone into administration.
They have appointed administrators to sell off / salvage / close down or whatever they do, but we're more concerned with things closer to home.
Basically what happens next?
They’ve already been told that they won’t be paid from 1st – 10th March, but there should be some money to pay them at some point for the rest of March.
The staff have all been told to carry on as normal as otherwise they won’t be able to sell the company as a going concern …
I think the whole thing stinks, but obviously we’ve got a mortgage to pay and want to know what they can legally do with non paying of salaries.
There will hopefully be an administration excerpt along shortly to correct me, but this is from my painful experience.
The adminstrators have assumed responsibility for the assets, but they have not assumed liabilities. Her old contract is worthless. She is unlikely to get the missing pay unless the employees or union negotiate that. She is unlikely to get redundancy pay (excepting a small legal requirement) she needs to verify how much this is, and whether she can claim it anyway if she walks away now. The information is likely to be on the Department of Work & Pensions website.
There are two elements to consider. First, viability of the business and her job within it. What are the odds of a viable business being sold (or perhaps a management buyout)? What are her odds of being retained, if say half the workforce were dismissed? That will start to clarify whether there is merit in hanging in there, or whether to cut her losses, walk away, and commit 100% to finding a new job (it might be worth viewing this as getting a headstart on all the other ex-employees).
Secondly, the administrators have asked her to stay on, but appear not to have made any commitment to paying her for that. She needs a new written contract or guarantee, whether personal or for all staff (again, perhaps negotiated by the union). How much, and how long are payments gauranteed? The administrators will probably provide this, if asked, but if there's no written guarantee she's trusting someone whose legal obligations don't include her. In this situation I would think very carefully about walking away.
It is very hard to know what to do. It could work out, if the business is sold rapidly as a going concern. It could go badly, and if it does she has very little protection. Some quick research and bold, selfish decisions are in order. At the very least, you should work on the premise that you are now a one-income family, and cut your cloth accordingly (you should do this while she works on her bit).
The adminstrators have assumed responsibility for the assets, but they have not assumed liabilities. Her old contract is worthless. She is unlikely to get the missing pay unless the employees or union negotiate that. She is unlikely to get redundancy pay (excepting a small legal requirement) she needs to verify how much this is, and whether she can claim it anyway if she walks away now. The information is likely to be on the Department of Work & Pensions website.
There are two elements to consider. First, viability of the business and her job within it. What are the odds of a viable business being sold (or perhaps a management buyout)? What are her odds of being retained, if say half the workforce were dismissed? That will start to clarify whether there is merit in hanging in there, or whether to cut her losses, walk away, and commit 100% to finding a new job (it might be worth viewing this as getting a headstart on all the other ex-employees).
Secondly, the administrators have asked her to stay on, but appear not to have made any commitment to paying her for that. She needs a new written contract or guarantee, whether personal or for all staff (again, perhaps negotiated by the union). How much, and how long are payments gauranteed? The administrators will probably provide this, if asked, but if there's no written guarantee she's trusting someone whose legal obligations don't include her. In this situation I would think very carefully about walking away.
It is very hard to know what to do. It could work out, if the business is sold rapidly as a going concern. It could go badly, and if it does she has very little protection. Some quick research and bold, selfish decisions are in order. At the very least, you should work on the premise that you are now a one-income family, and cut your cloth accordingly (you should do this while she works on her bit).
happened to me in January.
worked there for 6 years so claimed the following and received it all.
6 weeks worth of redundancy pay capped at £310 per week for each week basically one weeks pay for each year served.
2 weeks pay for 1st two weeks in january which the company couldn't pay capped at £310 per week.
6 weeks notice pay again capped at £310 for each week - this was slightly sneaky though as we all based it on amounts owed etc from commision not paid which would have been due end of jan.
Topped all that up again with a claim for unpaid earnings.
All of this was received via the insovency service/government bodies. you have to be pretty smart with the claim forms though and really know what you are putting down on them.
i got over £5.5k less the tax obviously - still a bit crap considering i was actually owed £10k in salary based on 4 months worth of commision due to be paid end of Jan.
I would strongly suggest she looks for another job straight away - if she was earning over £310 per week you can't claim anymore than this for each week and obviously it depends on her length of service as to exact amounts in terms of the redundancy. The administrators looked at the business in the same way i.e selling as going concern but 3 of us setup our own businesses within 24 hours and signed all our customers up so they couldn't sell it as it was worth basically nothing at all to anyone 48 hours after the announcement.
worked there for 6 years so claimed the following and received it all.
6 weeks worth of redundancy pay capped at £310 per week for each week basically one weeks pay for each year served.
2 weeks pay for 1st two weeks in january which the company couldn't pay capped at £310 per week.
6 weeks notice pay again capped at £310 for each week - this was slightly sneaky though as we all based it on amounts owed etc from commision not paid which would have been due end of jan.
Topped all that up again with a claim for unpaid earnings.
All of this was received via the insovency service/government bodies. you have to be pretty smart with the claim forms though and really know what you are putting down on them.
i got over £5.5k less the tax obviously - still a bit crap considering i was actually owed £10k in salary based on 4 months worth of commision due to be paid end of Jan.
I would strongly suggest she looks for another job straight away - if she was earning over £310 per week you can't claim anymore than this for each week and obviously it depends on her length of service as to exact amounts in terms of the redundancy. The administrators looked at the business in the same way i.e selling as going concern but 3 of us setup our own businesses within 24 hours and signed all our customers up so they couldn't sell it as it was worth basically nothing at all to anyone 48 hours after the announcement.
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