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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 47375
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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I have a written employment contract that states I will be

Customer Question

I have a written employment contract that states I will be paid on the 21st of each month. Between March and June I was always paid up to a week late. On the 27th of July I was pulled into a meeting which I was told we would be paid late. During August I received several small payments totalling 33% of my July salary on the 21st of August I was not paid again. On the 30th of August I ran out of money and was forced to take a new job and now need to sell my house and move. I was given no pre warning in July this might happen. I am now separated from my family and young child and have to stay in a BandB whilst work in my new role and am despritaly trying to meet my direct debit payments.How can I get paid, I have been told the company has no money and can't pay me at the moment. I need to wait until they have traded their way out of the debt?Was my contracted breached? Did I need to work my notice? Should they pay me my notice?
Submitted: 10 months ago.
Category: Employment Law
Expert:  Ben Jones replied 10 months ago.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today. How long have you worked there for?

Customer: replied 10 months ago.
6 years
Expert:  Ben Jones replied 10 months ago.

The employer is indeed in breach of contract by not paying you as per the specified date in your contract. What that means is you are able to treat yourself as having been constructively dismissed, which means you are forced to resign as a result of the employer’s breach. That in turn makes the whole contract void and with it, any of the contractual terms including the notice period requirement. So if needed you can leave with immediate effect and not work your notice period. Technically they should pay you for the notice period you were force to give up but if they are having financial issues then they may not be that forthcoming with such payments. You are however able to pursue them for this, together with potential compensation for loss of earnings as a result of having to leave that job. If you have found a new job that pays similarly then these losses will be rather limited so it may not be worth pursuing but you can still go after the notice period you were due.

This is your basic legal position. I have more detailed advice for you in terms of the options you have to take this further, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

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Customer: replied 10 months ago.
In total I am owed 166% of my wages 11 holiday days and possibly 6 weeks notice.I have also been told that my contractual 3% pension hasn't been paid for several years.As this is a private limited company did they company become cash flow insolvent in July and is the company director personally liable for further debt made after that date ?Would I be better of if the company went into administration ?
Expert:  Ben Jones replied 10 months ago.

As this is a limited company the directors will not have personal responsibility for the company’s debts, the company has its own limited liability and it will be solely responsible for such debts.

If the company became officially insolvent then you could potentially seek compensation from the Government.

If an employer becomes insolvent, an employee can issue and pursue legal proceedings against them for any money owed. Whether it is worthwhile suing an insolvent employer is another matter and very much depends on the status of the company and what, if any, money and assets they have left. In most cases, pursuing legal action against the company would be pointless as they are unlikely to be able to satisfy any court judgment against them.

The first step would be to contact the company’s insolvency practitioners (administrator, liquidator, etc.) to check if it is likely for any money or assets to become available for distribution amongst the company's creditors, including their employees.

If it appears unlikely that the company will be able to cover these payments, employees will also have additional rights to claim through the National Insurance Fund (NIF). The following debts, if owed to employees by an insolvent employer, can be recovered from the NIF:

· 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.

· Statutory redundancy payment less any amount already paid by the employer

Any claims in excess of the above limits should be claimed from the insolvent employer in the usual way, such as through the insolvency practitioner or through court.

To be able to claim from the NIF, the following conditions must be met:

· Only employees can claim, therefore the self-employed, agency workers, etc are not covered

· The employer must have been made officially insolvent

· The employee’s employment must have been terminated

Assuming the above criteria have been met, the procedure for claiming requires the application to be made to the Redundancy Payment Office responsible for the employer’s area, by using form RP1. To get a copy of the form and for further details, you can contact the Redundancy Payments Helpline on 0845(###) ###-####

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