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JGM
JGM, Solicitor
Category: Scots Law
Satisfied Customers: 10099
Experience:  30 years as a practising solicitor.
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We had a small dog walking business where we employed a lady

Customer Question

We had a small dog walking business where we employed a lady to walk dogs. The company has been around now for 18 months and we invoiced between 900 and 1300 each month pending on the number of dogs we walked.
The agreement with the lady who did the walking was that, of the money the company earned, we would pay her a wage. The wage tended to be between 70% to 80% of the monthly company takings. The remaining money was to cover business running costs like maintaining the company van, van servicing, MOT, insurance, leads, dog treats, National Insurance, etc etc.
We needed to walk 18 dogs a day, which works out as 6 dogs maximum, 3 walks a day which is standard for the industry. At this stage, we didn't have this many customers so she was doing about one walk a day. Sometime 2 if we had a day with extra dogs booked in. We offered full day care which only happened once or twice a month. The company was in growth stages as there are not too many businesses that can open with a full book of clients. We needed to build this up which was slow.
She quit on Tuesday for two reasons:
1. Not enough money - which I do respect because we didn't have enough dogs booked in each day for a full time wage.
2. She believed that 100% of the money the company invoiced the customers each month (900 to 1300) was her wages and that we had no right to be paying company expenses with her wages. Her wages was the full amount the company invoiced and that she shouldn't be paying company expenses out of her own pocket.
We tried to explain that the amount invoiced was the company income and of that she got a wage. Unfortunately we have failed in our ability to explain this.
At the end of the day, the money retained by the business was never enough to cover the cost of running the business, so my partner and I paid for a lot out of our own pockets. Even topped up her staff wages by a few hundred a month just to make sure she had a bit of money. This was only going to be short term whist we were building the business up. Instead of taking the risk of getting a business loan and paying this back, we funded it ourselves.
She has since threatened to go to The Citizens Advice Bureau to get the wages back that she feels we took from her to pay for business expenses.
Does she have a case?
With the business running at a loss and us being out of pocket a few hundred a month, there is no money in the business for her to take.
Can she come after as individuals if the business has no money to give her?
My partner and I work in the financial sector. If we have a company that is sent bankrupt (for example, if she sues us), or CCJ, or we have a personal bankruptcy claim etc, we will lose our current jobs. This means, selling the house because we couldn't make repayments and we would also need to retrain into other careers because we couldn't work in the financial sector again. All banks do a pre-employment screening and anything like this would turn up in our records and we would be declined the job as a result.
Can she pursue us for the money retained by the business?
For example, can she claim we paid her below minimum wage and we are pursued to pay the gap? She could easily say that she was working 12 hours a day because we had no mechanism to 'clock in and clock out'.
Thanks in advance.
Submitted: 11 months ago.
Category: Scots Law
Expert:  JGM replied 11 months ago.
Thank you for your question.
She has no case assuming she was paid at least the minimum wage for her contractual hours.
If your company is a limited company she has no claim against you as individuals.
It appears she has misunderstood her position and the way that businesses work. She has no understanding that the company pays her a wage and invoices its customers for the service it provides.
She can't claim she was working 12 hours a day. Her contract would only be for hours worked in that kind of industry and you will have time records to establish her hours.
I hope this helps. Please leave a positive response so that I am credited for my time.

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