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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 48190
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Hi, I am one of 3 directors at a company that employees

Resolved Question:

Hi,
I am one of 3 directors at a company that employees a further 13 people.
If we decided to wind down the company on Monday, what would be the redundancy procedure in regards ***** ***** frame if we informed everyone on Monday? We have the funds to cover all the redundancy pay. Also do directors receive redundancy or inly none shareholding directors?
Submitted: 2 years ago.
Category: Employment Law
Expert:  Ben Jones replied 2 years ago.
Ben Jones :

Hello, my name is ***** ***** it is my pleasure to assist you with your question today. Are there any alternatives on keeping the employees in a job?

Customer:

Hi,

Customer:

There are no alternatives, we wish to wind down the company, we have cash reserves in the bank but we have had no work incoming for 6 months.

Ben Jones :

Hi, sorry I was offline by the time you had replied. Whilst the closure of the company will meet the criteria for a redundancy situation, you would still be expected to follow a fair redundancy procedure. This would include consulting with the affected employees, discussing the reasons for the proposed redundancy, looking at alternatives if any exist and if it is confirmed that redundancy is the only option then you need to issue them with formal notice of redundancy and also allow them to appeal if they want to.

The consultation can be a meeting or two with the affected employees to discuss the matters listed above. Document what was said and then assuming the redundancy is confirmed you can proceed to give them notice as per their individual contracts. If the company is going to continue operating for some time they can work through their notice period but if it is closing before that then you will have to pay them in lieu of notice, so the equivalent of the pay for their notice period, any holidays they have accrued and the redundancy payment if they are due one. You can calculate their individual entitlements to redundancy pay here:

https://www.gov.uk/calculate-your-redundancy-pay

In terms of the directors and whether they are entitled to any redundancy that would only be the case if they are actually employees, rather than just executive directors. It is possible for someone to be an employee and a registered director at Companies House but they will only get redundancy if they are also employees rather than having a non-employee director’s role.

Hope this clarifies your position? If you could please let me know that would be great, thank you

Customer:

Many thanks for your answer.

Customer:

Just to confirm, the notice period (paid in lieu or worked) can commence immediately after a confirmation of redundancy meeting?

Ben Jones :

yes as soon as the redundancy has been confirmed and the employees have been issued with formal notice of redundancy that is when the notice period starts to run and they can be paid in lieu of notice and their employment terminated

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