Non payment of wages

[OneHandFlapping]

I'm posting this on behalf of a relative who has been truly shafted by her former employer, who hasn't paid her almost £1000 in wages, although she has received a payslip.

Her employer was a limited company in the hospitality industry, who seems to have ceased trading with over £50,000 in cash assets, according to Companies House, so it appears it was not insolvent.

The owner has reopened an identical business, under a different company and trading name. I think the new business is in the same location as the old one.

My relative has taken the company to the small claims court, and won, and paid for bailiffs to go in and seize assets - which they were unable to do as the location they went to "had a different name on it".

Does anyone know what she can do next?

Does she have any claim against the owner in person?

Having £50k cash does not prevent the business from being insolvent. That depends on the level of debt.

If the old company has ceased trading your relative is an unsecured creditor. The liquidator for the old company will pay off the secured creditors first. If there is any money left over that will be distributed to the unsecured creditors.

The owner of the business is only personally liable if the old company traded fraudulently or where there has been wrongful trading, i.e. the company continued trading when it should have been obvious to the directors that it was going to be forced into liquidation through insolvency.

Your relative needs to contact the liquidator for the original company and make sure they are aware of her claim. I'm afraid there is no guarantee she will get any of the money she is owed.

How does she find out who the liquidator is?

What if the company wasn't insolvent and the owner just wound up the company himself?

You can find out who the liquidator is from Companies House. The information is available free of charge on their website. The liquidator must be an authorised insolvency practitioner.

A company can only avoid going through liquidation if it has not traded or changed its name for 3 months, is not subject to any legal proceedings and has not sold its property or rights.

Thanks so much for your help, prh.

If it is wound up without going through liquidation, then presumably the remaining assets are sold, and the profits distributed to the Shareholders.

Would it be fraudulent if this was done knowing there were unpaid creditors?

As the company has been trading recently it has to go through liquidation to be wound up. The shareholders should not get anything until all the creditors have been paid.

Thanks so much for your help!