Who is liable for wages when company is in administration?
Discussion
Wondering if anyone can help....
The company I was working for went into administration on the 12th Jan, with a view to being bought out (pheonix type revival). Some employees were made redundant on that day, myself and 4 others were kept on as 'key employees'. However, about two weeks later (22nd Jan) we were all made redundant. We all filled out the RP1 claim form for redundancy and unpaid wages (we had not been paid since 1st Dec 2009 - so it should have been 8 weeks back pay). We have now been paid by the insolvency service (the max ammount of £380 per week) but they only paid up until the 12th Jan (6.2 weeks). They are claiming that they only pay upto the date the company went insolvent - the day the administrators stepped in. Is this correct?
If so, who is liable for our remaining wages?
When we were kept on, the letter from the administrators said that we would continue to work under our existing contracts - at no time did they say that if the company is not bought out we wouldn't be paid for the extra time we were there!
The company I was working for went into administration on the 12th Jan, with a view to being bought out (pheonix type revival). Some employees were made redundant on that day, myself and 4 others were kept on as 'key employees'. However, about two weeks later (22nd Jan) we were all made redundant. We all filled out the RP1 claim form for redundancy and unpaid wages (we had not been paid since 1st Dec 2009 - so it should have been 8 weeks back pay). We have now been paid by the insolvency service (the max ammount of £380 per week) but they only paid up until the 12th Jan (6.2 weeks). They are claiming that they only pay upto the date the company went insolvent - the day the administrators stepped in. Is this correct?
If so, who is liable for our remaining wages?
When we were kept on, the letter from the administrators said that we would continue to work under our existing contracts - at no time did they say that if the company is not bought out we wouldn't be paid for the extra time we were there!
Edited by Tobs on Thursday 4th February 13:00
Would be a good idea to go to the Citizens Advice Bureau and ask them. I worked for Threshers and was made redundant when they went bust. We were kept on by the administrators to sell the rest of the stock and were told that we would be paid to a specific date. In my case, as manager, it was Dec 16th even though my shop shut a week earlier as we'd sold all the stock. The sales assistants were only paid up till the day it closed. We did get paid via the company payroll system, but the administrators had set aside the funding.
The redundancy and holiday pay was paid via the Insolvency service, and also sent first through to the administrators to check before they sent it on. We were supposed to get notice pay, but verbal notification of administration seems to be sufficient - so we didn't get that.
Have you been in contact with your other colleagues?
The redundancy and holiday pay was paid via the Insolvency service, and also sent first through to the administrators to check before they sent it on. We were supposed to get notice pay, but verbal notification of administration seems to be sufficient - so we didn't get that.
Have you been in contact with your other colleagues?
Yes, I have been in contact with the other employees they are all in the same boat so to speak. We are awaiting an 'official' note from the administrators first, to see what they have to say. I agree, the CAB would probably be the best thing to try next.
Regarding the notice period, in theory I should have 8 weeks payment in lieu (8 years service). If the insolvency service only pay up until the administrators first came in then any ideas when the notice period start from? Would it be that date also (12th Jan) - or when we were actually made redundant (22nd Jan)?
Regarding the notice period, in theory I should have 8 weeks payment in lieu (8 years service). If the insolvency service only pay up until the administrators first came in then any ideas when the notice period start from? Would it be that date also (12th Jan) - or when we were actually made redundant (22nd Jan)?
That sounds pretty bad. My employer went into administration a year or so ago, and like you I was retained for a few weeks. In my case, however, on the day of administration we were told in writing that we'd now be paid weekly and they had put aside money for this.
The administrators were Deloitte and I must admit they pretty good to the employees that were left. I'm guessing your administrators didn't put this in writing (that you'd be paid)?
The administrators were Deloitte and I must admit they pretty good to the employees that were left. I'm guessing your administrators didn't put this in writing (that you'd be paid)?
When the company officially enters administration (granted by court) the administrator effectively takes over the running of the companies affairs.
If they (as the administrator) asked you to stay to ensure they got the maximum funds for the creditors, they should pay you - they will get their money/fee have no doubt!
It is a horrible situation and more likely there will have been back door agreements to make sure Directors are covered.
However, it does sound to me that if there isn't enough money to go round, they have over-run the company far too long, which as Directors you are not allowed to do. It's a fine line between trying to find a way out and accepting that there is no alternative, but depending how strongly you feel about it, you can petition for the directors to be held accountable for the debt and it'll cost you £1500-2000 to file to bankrupt the directors if needed to repay debt .... Not a nice thing, but like I said, depends how strongly you feel you were mislead, how hard they faught, and whether they are going to be out of pocket or made a behind the scenes deal.
Otherwise, give it up as a life lesson and move on ... It's unlikely you'll get anything.
If they (as the administrator) asked you to stay to ensure they got the maximum funds for the creditors, they should pay you - they will get their money/fee have no doubt!
It is a horrible situation and more likely there will have been back door agreements to make sure Directors are covered.
However, it does sound to me that if there isn't enough money to go round, they have over-run the company far too long, which as Directors you are not allowed to do. It's a fine line between trying to find a way out and accepting that there is no alternative, but depending how strongly you feel about it, you can petition for the directors to be held accountable for the debt and it'll cost you £1500-2000 to file to bankrupt the directors if needed to repay debt .... Not a nice thing, but like I said, depends how strongly you feel you were mislead, how hard they faught, and whether they are going to be out of pocket or made a behind the scenes deal.
Otherwise, give it up as a life lesson and move on ... It's unlikely you'll get anything.
buymeabar said:
That sounds pretty bad. My employer went into administration a year or so ago, and like you I was retained for a few weeks. In my case, however, on the day of administration we were told in writing that we'd now be paid weekly and they had put aside money for this.
The administrators were Deloitte and I must admit they pretty good to the employees that were left. I'm guessing your administrators didn't put this in writing (that you'd be paid)?
We had a letter on the first day the company went into administration, it said that we were to be retained, under the terms of our existing contract, to keep the business running as a going concern. I/we assumed as it said this, I would also be paid as stated in our contracts!The administrators were Deloitte and I must admit they pretty good to the employees that were left. I'm guessing your administrators didn't put this in writing (that you'd be paid)?
We are still awaiting the official word from the administrator (they are sending us a letter). Once we have this, we will have to decide what to do next.
Tobs said:
Regarding the notice period, in theory I should have 8 weeks payment in lieu (8 years service). If the insolvency service only pay up until the administrators first came in then any ideas when the notice period start from? Would it be that date also (12th Jan) - or when we were actually made redundant (22nd Jan)?
Re the notice period, I was told today by one of my ex-colleagues that a notice pay claim form comes through approx 3 weeks after you get your redundancy money from the Insolvency Service. There was a part on the RPI form if you were claiming for notice period, so if you filled that bit out correctly you should get that form sometime. My ex-colleague also said that they deduct what you received in JSA during the period from it. Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff