What happens to your employees?
Introduction
Speak to a company debt advice specialist or click here for further advice.
This section provides directors of companies with advice on how to deal with employees where the company is insolvent.Employees of an insolvent company should be advised that they have a claim for a limited amount of unpaid wages (preferentially) before most other creditors. They can also claim some monies the insolvent company owes them from the Department of Trade and Industry (DTI).
Explain their rights to them
- If the company is insolvent and has not paid employees their last 4 months' wages (including holiday pay), employees will be paid up to £800 before most of the companies other creditors.
- If employees are owed more than £800, they can claim for the balance at the same time as all other claims.
- If there is not enough money to pay all employees £800, each employee will be paid an equal portion.
- If the insolvency company has been unable to pay the statutory redundancy payment or statutory maternity pay the ex-employees can apply for payment from the Department of Trade and Industry (DTI)
The DTI also has the power to pay to ex-employees specific monies owed to them, such as:-
- Up to 8 weeks' arrears of pay
- Your statutory notice period;
- Up to 6 weeks' holiday pay;
- Any basic award of compensation for unfair dismissal;
- A reasonable sum, as reimbursement for fees/premiums paid by an apprentice.
The DTI has the power to make a payment into the ex-employee's new occupational payment scheme, in respect of certain payments which the insolvent company failed to do.
The Main options for a limited company in distress:
- Insolvency
- Liquidation
- Pre-pack administration
- CVA
- Company Rescue
- HMRC Tax Advice
- Company finance / re-finance options
Speak to a company debt advice specialist or click here for further advice.
IVA's
The IVA Guide
Money Advice Direct has put together an IVA Guide based on the enquiries and questions that we receive at our helpline offices.
In the guide we cover such subjects as IVA Approval, early settlment of your IVA, missed IVA payments, IVA failure, additional debt claims and much more.
[click here for IVA Guide]
What is an IVA?
The IVA is an extremely powerful tool enabling you to clear your debt and return to a clean financial bill of health. Visit Money Advice Direct's Guide to Individual Voluntary Arrangements (IVAs).
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DANGER
Due to the tremendous demand for debt consolidation services the United Kingdom is now overloaded with debt management companies that contain misleading information. [more...]