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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
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Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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An employer has recently made several employees redundant within

Resolved Question:

An employer has recently made several employees redundant within the sales department. All less than 2 years service. The consultation was with only those employees made redundant on the day of redundancy. The employees were invited to a Christmas dinner and asked to leave their company cars and laptops and make their own way home with £50. No notice was given. The basis was the future needs of the business. Some sales employees who were later joiners to the company remain as to some individuals who have produced less in sales for the company. There were no appraisals, no prior performance management issues and some of the affected employees had delivered sales beyond company targets.

The employer has entered into a CVA but still retains other employees and is still trading.

For the employees made redundant the employer has provided a RP1 form to claim the notice period and the accrued holiday pay.

My question is, what other legal routes exist, be it small claims court for breach of contract or employment tribunial if process had been implemented incorrectly.
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. When exactly did they start working for this employer?

Customer:

21.11.12

Customer:

Other notes: Contract of employment stated four weeks notice.

Ben Jones :

As the employees do not have the required length of service (2 years) to be protected against unfair dismissal, they cannot challenge the reasons or fairness of the dismissal. As such their only claims would be for any contractual benefits due to them, such as wages, holidays and notice pay. They will not be entitled to receive any redundancy pay.


 


If the company has formally entered an insolvency procedure, then the claim can be covered by the National insurance Fund, which will pay out certain amounts that are owed:



  • Up to 8 weeks' arrears of pay (up to the current maximum statutory limit on a week's pay) less basic rate tax and NI contributions.

  • Up to 6 weeks' holiday pay (up to the current maximum statutory limit on a week's pay) which accrued in the 12 month period ending on the date of the insolvency, less basic rate tax and NI contributions.

  • Statutory notice pay (up to the current maximum statutory limit on a week's pay) less basic rate tax.


 


If the NIF will not cover these claims (there are many technicalities which could be relied on) then a claim can be made against the company directly through the county court. The financial status of the company at the time will be important because there is still a possibility the company may go insolvent and close down and without any money and assets to satisfy any potential claims, it would be inadvisable to sue it.

Customer:

So, I get it. Is it a commercial decision is the CVA is a ruse and the company intention is to trade out. The directors are very wealthy and have

Customer:

have numerous companies within the group, it is unlikely that they would let it die off becuase their name, it provides tax advisory services would be uncommercial.

Customer:

okay is your answer complete?

Ben Jones :

A lot will depend on the company's financial situation at the time and whether it is likely to be able to satisfy any judgment against it. Whilst the directors may be wealthy, this claim is not against them - the company is a separate legal entity and it is its own financial situation that matters

Ben Jones :

Please let me know if this has answered your query or if you need me to clarify anything else for you in relation to this?

Customer:

complete

Ben Jones :

many thanks, XXXXX XXXXX best

Customer:

FYI, trying to rate the answer so that you can receive the credit but not allowing me. I am satisfied with the response.

Ben Jones :

Thanks, XXXXX XXXXX resolve at my end

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