‘Self-employed’ DH not been paid by failing company - need legal advice!

[DasAlteLeid]

Hello!

if anyone could give us some advice we’d be so grateful, we can’t even afford our next round of bills so contacting a solicitor is definitely out of budget right now!!

My husband has worked for six years as a permanent employee with a small company. Six months ago they sold off the most profitable part of the business (fuck knows why), and told DH as the Ops Director that they could no longer afford his wage, but that if he went ‘self-employed’, they could afford to give him a slightly higher take home as they would not be paying pension, insurance etc. We couldn’t afford to take less so agreed. The very next month the company told DH that they were having a ‘cash flow’ problem and could only pay part of his salary, with an assurance the rest would be paid within the next two weeks. Long story short, they now owe us around £10k, the business seems to be tanking around their ears and there seems to be no additional payment in sight. They’ve paid us dribs and drabs every few weeks and we have had no choice but to stay with them as if DH doesn’t do the (highly skilled, complex electrical) work, the jobs won’t get done and we’ll never get our money. This week we’ve finally reached the end of our savings and DH has been told there are no jobs for the next week, so he’s walked out and told them he won’t go back without a substantial payout.

My question is this: where do we stand regarding our money? The company has a few low-level creditors and a small amount of assets (maybe £12k), DH is convinced that as a ‘self employed contractor’ he will be last on the list to get paid if the company is liquidised. The company has totally shafted him in my eyes by taking him off the payroll, it seems it was a purposeful and malicious move to screw him over financially and save their own skins!! Is there anything we can do to recoup our money from this semi-failing business? The shareholders are all extremely wealthy but my understanding is that they are not culpable for the company debts despite their positions?

Thanks v much for any advice at all x

Bumping for you

It’s not a salary, for starters. And yes, he’ll be pretty low on the list of creditors. I wouldn’t bank on seeing any of that money. He should have stopped working after the first or second invoice wasn’t paid.

It’s a sham of a contract, should have seen the red flags and got out.

he needs to find new employment ASAP.

It's not what you want to hear, but don't expect the money. I know it's too late now, but did neither you nor your husband see this happening? The company told him they were skint.

He will be pretty low down on the list for a payout of the company goes into liquidation.

A limited company is a legal entity in its own right. So no, the directors couldn’t be chased for company debts.

It sounds like he was still employed according to the HMRC definition so he could try to pursue that but it’s likely they will just close (and probably phoenix) the company so unfortunately I don’t think stand much chance of getting any money from them

@OverTheHillAndDownTotherSide @User38899953 obviously we saw the red flags and have been trying to get him a new job even before the change in employment. We apply for about 5/6 jobs a day with cover letter etc. We live in an area of fairly low wages and it’s hard to find anything that fits his skill set and pays enough. He’s now doing some temp work for a friend and I’ve upped my hours at work too but it won’t come close to plugging the gap. But thanks for your opinions.

May I just ask if anyone who has replied works in employment law? I’ve read that we can report the company as insolvent and get them shut down, plus it seems my DH was working as ‘self employed’ in an unlawful way according to the .gov.uk website, which I thought might leave us more entitled to compensation as according to law, he is not really self-employed at all, and the company are culpable for that. Also would it be worth taking them to small claims?

Thanks again for any advice, and I don’t really need a kicking about red flags etc, this isn’t AIBU and we’re facing financial ruin, so would appreciate no more comments about things we can’t change.

Why is it your money and we are trying to get him a job? Weird choice of words.

Excuse me? ‘We’ are trying to get him a job because I only work part time (we have a young child before you ask) and have more time to apply for jobs for him than he has, and it’s ‘my money’ (although I don’t recall writing that anywhere??) because I have bankrolled our entire marriage as the far higher earner for many years before I had a nervous breakdown in 2020 due to chronic bullying at work and nearly losing my child. But feel free to fuck off @Swampthing55 apt name btw.

I’m going to hide this thread now. I honestly can’t believe how nasty and critical some people can be considering the situation I have described. I might be poor but at least I’m not a cunt.

Bumping in case anyone more qualified can give you practical advice.

I have no legal knowledge. Only as an accounts person.

But whether your Dh has already registered himself as self employed is kind of irrelevant. He was an employee. Then chose to no longer be an employee, but go self employed. So presumably has been submitting invoices. He is thus no more entitled to have his invoices settled more quickly than any of their other creditors. I'd tell them you want it paid asap. If not tell them now your'll go small claims. Warn them now. Because he still has insider knowledge of how bad their financial situation is, he has a better chance of getting his money, before the other creditors cotton on and submit their own small claims. He'll have to be quick though, and use the inside knowledge to his advantage. If he leaves it too late, he won't get his money most likely.

I’m a HR Director. (And have been director of a Ltd company for last 12 years too.)

But if he does that route, that'll be the end of their relationship. So he'll have to already be applying for other jobs.

The reality is that even if you are entitled to it, it could be ages through legal channels to get it.

you should both be applying for full time jobs. Given Your earning potential, you should be trying to get a big income position as well.

Is he a member of a union? (If not, join one next time) Does your home insurance cover legal support? If neither contact ACAS and CAB. It may also be worth contacting Which Legal (£17.99 or so a month I think). IANAL but I would be concerned that the move from employment to self-employment was compelled- and at a time when the directors knew they could not pay him (that should be wrongful or fraudulent trading but directors are almost never prosecuted for this).

Others are right, apply for other jobs and you may never get this back, but I find it appalling the way the company has behaved. It should be illegal. Good luck

I know it’s stressful, but that’s a massive over-reaction.

Take some time out, revisit the thread when you feel better and I’m sure there’ll be additional help forthcoming.