DH's work said they have no money to pay salaries this month as creditors have not paid them yet....(11 Posts)
This is not the first time they are saying this although so far thankfully they have always paid. I cannot imagine it is at all legal for them to not pay salaries in. Any one have any advice on how to deal with this? Every month they are just piling on the pressure on everyone working there wondering whether they will be able to pay the mortgage that month... Would the CAB be able to advise on this or should we contact an employment solicitor? TIA
wft? Outrageous! Yes, do go to CAB urgently! How on earth do they manage their cashflow? Sounds very dodgy indeed -what sort of business doesn't know whether it can pay wages or not?
Nearly all companies go bust because of cash flow problems, not because of profitability problems, so this problem doesn't sound unusual to me.
It is illegal for them to contract with people to provide them with their services if they know in advance they will be unable to pay, and no doubt it will be a breach of contract too. But that doesn't mean you can do anything about it of course. If they haven't got the money, they can't give it to him, and no amount of court/legal action will change that.
If you think they DO have money in the kitty and could pay DH then, that is different and he should take action, but if they genuinely don't have the cash then he should pester them as much as he can and look around fast for another job. Once the payroll is affected, things are pretty bad in any organisation.
What squiffy said. It's not legal and would probably be a breach of contract, as well as a potential tribunal claim for non payment of wages.
However, it would be a fair while before any such claim would be brought, and if they literally don't have the money, even longer before any of the cash is forthcoming, if at all.
Because of the impact of not paying staff, as squiffy says, things would have to be really really bad before they consider doing so.
Thanks for the replies. Clients are large corporations that definitely can and will pay. DH had a Christmas dinner the other week so they could afford to pay this... Seems they are just holding back the salaries of senior management this month of which dh is one. There have been other personal expenses by the owner over the last few months so seems this may have caused some of the cashflow problems I think. DH is busy looking elsewhere but in
the meantime he's stuck there. I also told him that they can't just not pay as this is a breach of contract. Can disclosure of the firm's real financial position only be forced by a lawsuit?
Not that it is particularly relevant for you, but I always remember that that reason Macdonalds pay their staff fortnightly rather than weekly is that one week they didn't have the money for the wage bill, so rolled it over to the next week and announced this as a fait accompli to all the staff. Can you imagine being weekly paid and just not being paid one week!
So, if Macdonalds can do this, I guess it is OK. Would be looking for another position though asap if it were me.
Have a look at Companies House - can't remember the web address but google it. Should find something there.
I am guessing it won't be a case of never receiving payment, more likely to be delaying it?
The trouble with making a claim is the length of time. He'd have to bring a grievance first, wait 28 days, then he could bring a tribunal claim, wait for that, then have a judgment. Once he's got a judgment against the employer they still might not pay, especially if they genuinely have a cash flow problem. Then he'd have to ask the local county court to enforce it.
If it's a question of delaying rather than refusing to pay, chances are by the time he's done all that they would have paid it anyway.
Thanks flowery. It's correct that the pay will probably be delayed. What really gets to me though that for the past 3 months they have been saying the same which just causes stress every time. Oh and there was still some money today to take DH and some colleagues for a company paid lunch . DH is being interviewed by headhunters regularly but it's just a really quiet time on the job market.
Prob paying for company lunch on CC and everything else on their own 30-90 day credit accounts !
Not a lot you can do - claims take too much time. If they havent got the cash, they haven't got the cash. They may be owed money from creditors - but how are sales in general? If they have slowed down, alarm bells for future !
Been there myself and it ain't nice. But just get out of there ASAP. Cos if they have had to do this at Christmas, this really is desperate times !
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