Business closed. No wages.

[zandy]

dd worked part time.

All staff turned up one day to get a letter saying the business was closed and they had no money to settle the wages bill. (all staff affected, not just dd).

Insovency officials said she would get her money, but would take about five weeks.

Eventually heard word that they are not getting money from insovency people as they are all now working for a new employer (doing their old jobs in the old buildings with new owner - new owner also happens to be one of the owners of the old business). Apparnetly the new employers ought to pay them because of Tupe regulations.

New boss (who was one of the partners in the old business) says he is not having to pay them because they did not come to him in a transfer of obligations, but the old business was closed, and he then employed them as new staff in a new business.

Now the staff are having to contact the insolvency people again.

Any idea how it is likely to end?

And, she has contacted them again this morning, and been told she's not getting money, so she has to take it to the next step, which is suing the company which went bankrupt. Can you sue a company which no longer exists?

Is your dd interested in working for the new company?

Have any other previous employees been paid, or are they simply 'glad' to be employed/earning again?

How much money is your dd owed?

It depends what happened to the business she worked for I would think.

If the business closed and the former boss started a new business up re-employing the employees then it is the responsibility of the people dealing with the insolvency to pay the wages (or if there really is no money to help them with claiming what they can from the government).

If the former boss bought the business and the employees are still employed by the same company as before on the same contracts then he is required to pay the wages.

But I'm not an insolvency practioner so this is just from vague experience/the odd seminar.

Do you know what has happened exactly? Re the two above scenarios?

If she gets no joy from the insolvency people I would contact CAB tbh.

The old company she worked for was a partnership of two men. The company went bankrupt. Closed down.

The new company has taken over, still the same sort of business in the same premises. The new company is owned by one of the previous partners, alone.

The company closed down, she got a letter saying it has closed, no more work, she was given a p45.

Three days later the new (old) man opened the new company and offered her, and her colleagues, jobs in the new business.

My dd is now working for the new man doing the same work as before.

She is owed 133 hours of work at minimum wage (she is part time, working evenings/weekends whilst at college), plus whatever extras for holiday etc.

p.s. all the old staff are in the same position, re wages.

This sounds like a Phoenix company. The old company goes down in flames and magically a new company doing the same stuff rises out of the ashes.
It is a separate company so not liable for any of the debts from the old company including wages. It is (only just) legal, but many people in business would say unethical. However, horribly common.
Eventually they may get a very small amount of money from the liquidators often around 2p in the £1 owed.

What your DD may be able to reclaim and from who really depends on a nuumber of fairly technical issues, and it may be better to ask CAB or ACAS for advice.

I am not an employment lawyer, just an accountant, but here's my twopenceworth.

Generally speaking, if the company became, then arrears of pay should be claimed from the RPO, up to a maximum of 8 weeks pay plus holiday pay etc. This is what the insolvency practioner was talking about, and you can see more information here.

The TUPE regulations may well apply - it depends on what happened to the original business. If it was sold directly to the new company, then the TUPE regaulations would apply. The sale of the company doesn't have to involve cash btw. It a slightly tricky area of law...there's a good summary of TUPE regulations here

But basically one or other should apply. Either the company became insolvent, a new business started up but there wa no TUPE transfer...in which case she can claim from the RPO. OR the business was transferred to a new company, and TUPE regulations will apply, in which case she should claim from the new company.

Thanks for all your input.

She will keep pushing, as will the rest of the staff.

Will let you know if/when anything else develops.

Sorry for typos in above post...

"Generally speaking, if the company became insolvent, then arrears..."

If it's proving hard to get any info from the employer, your DD should probably seek to clarify from the Insolvency practitioner exactly why they think the new employer should pay under the TUPE regulations - i.e get details of why the TUPE regulations apply, and why they cannot claim from the RPO.

She was on the phone to the insolvency people this morning, who apologised for sedinging out the wrong forms to her......then said he was new and didn't know too much about things.......and then conferred with his colleague who said there is nor further information available.

Not good.

She is very disheartened.
In such a short working life she has already been laid off by Woolworths and now this.

Just an update on this. DD has been to court with this, and was given a court order for the wages to be paid, but they have not been paid. She has employed a Bailiff (£100 this has cost her) to get the money back, and they have failed and it will cost her another £250 to further the chase for money. She just doesnt have this money. Life is so unfair!

Sorry to hear about this Zandy. I remembered your thread from back in June and wondered how it went.

As I said, I'm not a lawyer, but I would assume that there is some legal mechanism for dealing with people who do not comply with a court order (I know in extreme cases they can be imprisoned for contempt of court), but as I said, I'm really not sure.

I'd recommend asking in Legal Issues as well, as there are usually a few lawyers that post in there - if you put a link to this thread to give the background that might help.

Sorry I can't be more help.

apply to the court again and add the cost of further recovery to the bill for unpaid wages. ask at the court how to do this as you should be able to do it without a solicitor.

Final update.

The new company went into liquidation. She applied to the liquidators, who after a little bit of back and forth, forwarded her all the monies she was owed.

Thankyou for your interest.