To ask if anyone has ever sued a small business employer

[Laura505La]

I am going through the process of claiming for unfair dismissal and discrimination against my ex-employer.
Unfortunately they are a small business (Ltd comp.) owned and run by someone who treated the business like their own private bank account and therefore there will be no money in the business (I know there isn't - they are spenders rather than savers and I've been involved in the business for many years). They have some personal assets, but the business doesn't apart from assets which are critical to the business operation.

I seriously doubt they have the full employer insurance to cover the risk of being sued for unfair dismissal.

I have insurance that are providing my legal assistance to take them to a employment tribunal, but if I win how would I ever get compensation?

Damages for unfair dismissal aren’t particularly high, so a business would probably have insurance to cover legal claims, it’s a fairly standard clause of legal cover. Damages for discrimination can be higher, but even then, won’t be enormous.
You’ll have the chance to basically mediate through ACAS before a claim anyway, so set out there what you’re hoping for, they may pay to make it go away.
But yes, if damages are awarded against a company, they might be ordered to pay them over time to take into account running costs etc. They might also close down the entity and immediately re open under a similar name.
I would recommend asking your lawyer to engage in discussions to see what could be done before any claim is brought.

To add, I'm not looking for or expecting a huge amount of compensation - I have very clear direct financial losses, they aren't huge by anyone's estimate, and who knows who the judge will believe as even though I have evidence I don't assume that a judge would take my evidence as truth as I'm sure my ex-employer will cook up contradictory evidence.
I'm doing it out of principle because I have a bit of a niche protected attribute and also because it's a small amount of money I've lost (probably about £10k) but when you are on a limited income that's a very significant amount!

But I'm not asking about my situation, more what happens if employers can't afford to pay fines/compensation, and don't have the insurance to cover it, do you ever get the compensation?

Why are you being so defeatist?
If it is not costing you anything - because insurance cover is paying - then what have you got to lose. Go and speak to a lawyer.

Do you still have contacts on the inside who could get you a copy of the company's insurance documents.

If you win, I suspect the only way they will be able to continue to run the business is to pay you.

The only way they can really get out of paying you (so long as you are persistent) is to fold the business. At which point you may get a claim on any assets.

If the business has no assets then it can be easily folded. But don't estimate the inconvenience of doing so for them, especially if they want to continue the business.

You might be surprised how many assets the business has. A lot of small business owners engage in some jiggery pokery to minimise tax, for example the business may own their vehicles, they may have loaned the business money or the business may owe them money. Folding a business under these circumstances again can be quite inconvenient. A check of the public accounts might provide some info on this.

As for business owners running businesses "like their own private bank account", it's their business and they are entitled to do what they want with it, provided they obey the accounting/taxation rules. Money may fly between the owners personal and business accounts, but so long as it is properly accounted for and tax paid where necessary it is completely fine. Business owners don't tend to want to keep piles of cash lying around in businesses, for a whole host of reasons.

@GasPanic is correct. It’s a hassle for a business to close down and re start, definitely more hassle and expense than £10k, unless they’re doing very badly.
i would just follow your lawyer’s advice - they may suggest settling for less to actually receive something (a bird in the hand etc!)
It’s also true about “treating it like their bank account”. Most businesses will be advised by their accountant as to the best way to pay the least tax, this is perfectly legal and normal to do. No sensible business person would want cash building up in a business and would look for sensible ways to withdraw it, reinvest etc. That’s no comment on your position, but all sensible small (and large) businesses use any means possible and legal to pay as little tax as possible.

Thanks for starting this post. I am in a similar situation. I have just won £15k at an Employment Tribunal. Payment deadline is tomorrow and I know they won't pay. I will inform eh court and pay the extra for bayliffs but the company has no assets and isn't actually trading as they have already started selling all their products out of a different company. The company is still open though - do I ever stand a chance of getting anything back?

On your employment claim you can also make a claim against an individual as well as a company. I would name that person as well and then any award and or costs would come from his own money and not the company.

Not many people are aware of this but when I'm training managers on how not to discriminate etc I always let them know this! It certainly makes them sit up and pay attention knowing that they can personally be held responsible

Unfortunately tribunals have no powers to enforce payments and a shockingly high proportion of awards are not paid. I think you’d have to go to the county courts to get it enforced. I’d seriously consider if it’s worth it

Wow, I had no idea that you could sue individuals in employment matters!

Does that only apply for discrimination cases, or to general unfair dismissal as well?

@GasPanicis correct. It’s a hassle for a business to close down and re start, definitely more hassle and expense than £10k, unless they’re doing very badly.

That is not my experience. If they want to they can even fold the company before the hearing - in which case there is no respondent. I have seen many small (and often dodgy) employers simply fold the company and then set up again under another name - one particular firm local to me has done this and got away with it 6 times to my knowledge.

And no, it is generally not possible to sue an individual in anything but discrimination cases if the employer is a limited company - and actually the threat of suing an individual for discrimination sounds better than the reality, and it rarely happens.

I agree with @HermioneWeasley - the number of employers who get away with not paying, one way or another, are shockingly high; and the so-called enforcement comes at a cost - and even then they rarely get anything, so it is just more money down the drain.

@JemOfAWoman This is interesting. I already have the tribunal outcome. Is it too late to make a claim against the individual? How do I do that?

Thank you. I thought this might be the case. I'm half tempted to still pursue it on principal but probably need to get my head round the fact I won't see a penny.

I dont think you can get two bites of the legal cherry so to speak! It has to be done as part of the original claim.

Hi my company’s director came in the other day and was a bit butt hurt about another employee slandering him on social media I was telling said co worker that the director wasn’t happy about it and mentioned nothing that had been said in his rant I went outside for a smoke was on the phone and ended as the director came towards me he asked to see my call log I said I’m just messaging a friend who does not work for us I turned my phone around to show him this and he snatched the phone out of my hand and went onto another chat with my manager where all I had said was the director is talking about you he started to tell me how I’m not a very nice person and called me a d/ck went back into work and he said that I am being dismissed as I have broken confidentiality when I proved this wasn’t the case he then said that my services are no longer required my shift is being terminated and I no longer work for the company I was on probation at the time and in the contract as I was on 0 hours at the time they could get rid of me without reason as they have said. I don’t think the whole situation is okay at all and wanted to know if you there was anything I can do any legal work things that have been broken or anything I can personally to get him personally dealt with ?