Employer can't afford to pay me but won't claim insolvency

[GimmeMyMoney]

Long story short, ex employer owe me a little over £4.5k in unpaid wages (and all my pension contributions for 2023 which weren't actually transferred to provider, but that's a different story).

They've ignored ACAS early conciliation and are no longer trading through the company I was employed through. However, the MD is refusing to file for insolvency (presumably due to potential directorship penalties) so I can't even claim some back from the government.

What realistically can ACAS do if I take it to tribunal and employer ignores them, given there are no assets left in the company to pay me from?

My understanding is that ACAS can't force them to pay and looking on the gov website it advises that court proceedings may not be successful if the funds/assets aren't there.

Surely I don't just have to forfeit almost £5k and seven months pension whilst they drive off into the sunset in their £100k BMWs?

These are rich guys with other businesses so we're not talking about struggling individuals. Obv that may be legally irrelevant but morally I don't want to take this lying down.

Small claims court?

Claim into an Employment Tribunal. You can represent yourself. County Court can enforce the order.

Alternatively if you've not been paid for work done you haven't been paid the National Min Wage and HMRC can also enforce breaches of that plus isn't there criminal liability on directors? I'm a bit rusty on this now but I think so. Presumably they'd not want to risk a conviction or being on a National Minimum Wage name & shame list. Could you use this as leverage? Possibly ask ACAS to tell them you're considering these courses of action & invite them to pay up.

Bankruptcy order? If they owe you over £750 and refuse to pay it (and no dispute) that's evidence they are bankrupt. (Insolvent as a company)

So you could get them wound up?

Bankruptcy is for individuals, liquidation/winding up is for companies. You can't (generally) claim a Ltd company debt from an individual.

If you were employed by a Ltd company and they aren't trading, there's no way for you to get your money from them as they don't have any.

You could petition the court to wind the company up yourself as you're owed money but it's expensive: www.gov.uk/wind-up-a-company-that-owes-you-money

U had unpaid super in Australia. I reported it to the tax office and they recovered it.

Do you mean an ACAS tribunal? I've just sent off the application last night.

And thanks for the replies. 🙏

This is good info.

I'd read that sometimes this happens when a creditor brings a case and they can't pay, but wasn't sure of the threshold. Obv a bit different if they've breached a large contract and caused £500k of financial shortfall.

MD has already paid off his mate apparently - a guy that has a £150k Range Rover, two BMW 7 Series, and a mortgage free house worth over £1m (was built by a subsidiary company along with about ten others).

Other director is in the process of selling off 30 flats he owns (I know the builder helping with this).

Meanwhile me and 3-4 others have been left out of pocket. My line manager (who repeatedly promised they'd sort us) has quit his directorship and is claiming he's no longer involved and MD is ignoring calls or making excuses that he has to take another call and then not calling back if reached on another line.

It's been a while since I worked in credit management - but is it not illegal to continue to trade when you know the company is insolvent?

Ah, just saw this. Not looking good then tbh. So basically they can just get away with murder?

They're no longer trading through this business. It's active but not being used. They have other businesses.

I'm in the UK and I believe it can only be claimed back once, the company is insolvent.

You do have options.

Use a threat of either court action or a report to HMRC for breach of minimum wage legislation to get them to either pay you and the others off or wind up the company to allow you to claim government compensation. Small Claims Court is very cheap and easy. Do you have union membership or legal expenses cover through house insurance/credit card etc.

I'm not an expert but if they've got the money available they might be willing to find it privately to avoid minimum wage breach prosecution.

Thanks that's good advice. No union unfortunately. Was a subsidiary company ran by directors of a medium sized construction firm which is now winding down. All the directors were wealthy before forming the larger company and own lots of property (rentals etc).

The larger company was involved in projects like acquiring land and building up to 100-150 flats from scratch. Sometimes acquiring brownfield land, getting planning permission, and then selling it on to a large contractor 1-2 years later.

Spoke to HMRC and they said might not be able to help if already in a claim with ACAS (weren't sure as only submitted claim late last night and not yet accepted). But best case scenario they could only get NMW paid to me which is going to be a pretty big shortfall.

@GimmeMyMoney The steps you'll need to take next are as follows:

1. First, you need to submit a claim against the company to the County Court Money Claims Centre. You can do this online.

2. When judgment is given, presumably in your favour, the company will then need to pay you. If it cannot do so, you can enforce the judgment.

3. If the company is unable to pay you when the judgment is enforced, it will be subject to involuntary insolvency proceedings. These proceedings will also look at any wrongful trading by the company or any preferential transactions in the year prior to insolvency (e.g. if the Directors removed money from the company to pay preferred creditors because they knew it was insolvent).

If the directors are found to have made preferential transactions or committed wrongful trading, they made have to reimburse you from their own money. If I was advising them, I may tell them to pay you now depending on the circumstances because if they have made preferential transactions or committed wrongful trading they are also likely to be disqualified as directors.

You should contact The Pensions Regulator about your missing pension contributions - they will pursue your employer and that might lead to them becoming insolvent.

www.thepensionsregulator.gov.uk/en/contact-us/scheme-members-who-to-contact/report-concerns-about-your-workplace-pension/report-missing-payments-to-your-workplace-pension

Thanks so much for this.

Can I do this alongside ACAS tribunal or should I wait? Was supposed to be paid in full by end of Aug so time is ticking. Have already been through early conciliation to no effect.

If you have home contents insurance you might be covered for some legal bills: employment is often covered. Might be worth a try asking your insurers if they cover any legal bills, and you could get a solicitor.

You can absolutely do this. You don't need to wait for ACAS.

Personally I would issue a statutory demand on the company. This is free - fill in the form and if you get stuck come back to me. You then need to send s copy to all the directors via email and a copy by recorded delivery to the registered office.

https://www.gov.uk/government/publications/demand-immediate-payment-of-a-debt-form-sd2

This is the quickest way to get your money.

Concurrently keep your claim at ACAS early conciliation and check what other companies the directors have. Are there are any in similar line of work? If so you could potentially add them to the Legal proceedings On the basis of insolvency law.

This means there is commonality of ownership and directorship in the company.

I will give you a real life example. My former employer furloughed me during Covid and then made me redundant. They then decided to shut down the company and create a new one.
They did not pay redundancy, wages and holiday outstanding. I issued a statutory demand for £12k which is essentially a threat of bankruptcy and it was paid in full in 7 days. I then took out a claim using ACAS and obtained 30k tax free cash. Cost to me £1250:00 (represented at judicial mediation). Cost to them £35,000 & £12k.

If the plan is to screw the staff and start again ensure that you make individual directors named in your ACAS conciliation (separate form required for each director and join any live solvent company you can to proceedings before you submit your ET1.

Seek advice if you’re not confident on it. And remember they can shut down company and start new one with an outstanding legal claim.

Sorry that should say CANT shut down company with a live legal claim