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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 50187
Experience:  Qualified Employment Solicitor
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Employment question : we recently had to make a overhead

Customer Question

Employment question :
we recently had to make a overhead reduction in the company and made 2 persons redundant as the company would have had to close, as unable to pay -- one employee contract had a 2 month notice period, which this person is suggesting they will take to a tribunal.
whilst the company is still operating and trying to find a solution to its debts and revenue.
what is the employer legal position here.
it was advised to the employee no notice could be paid due to the company financial situation, hence the need to make redundancies
please advise
Submitted: 3 years ago.
Category: Employment Law
Expert:  Ben Jones replied 3 years ago.
Ben Jones : Hello, my name is ***** ***** it is my pleasure to assist you with your question today. What are they due to be paid for exactly?
JACUSTOMER-itpwi8ao- :

hi Ben

JACUSTOMER-itpwi8ao- :

Hi Ben, thank you for your reply.

JACUSTOMER-itpwi8ao- :

employment date started September 2013. notice period : two months by either party. notice must be given in writing.

JACUSTOMER-itpwi8ao- :

salary £40,000 per annum, which is pro rated to £32,000 for a four day week. during July 2014, the employment went too 3 days a week, so, pro rated further from £40,000

JACUSTOMER-itpwi8ao- :

however, the company needed to make redundancies to stop the company closing / going into administration and for this reason, stated that the company would not be able to pay notice period ???

Ben Jones :

Unfortunately in this case you still have a legal obligation to pay the employee’s notice period. The fact that the business is struggling does not exonerate you from this. Only if the business has actually gone insolvent will you be able to try and put this obligation aside, if there are genuinely no funds available. If that happens the employee could potentially try and get payment for part of what they are owed from the Government but for that to happen the business must have been declared insolvent. Until then, it is still your responsibility to pay that. What could happen is that the employee makes a claim in tribunal or tries to petition for the business’ insolvency and once that happens it would entitle them to make a claim from the Government. What you could do is make it clear that even if they go to tribunal it would not clear up any funds to allow you to pay them and they will just be wasting their time and money – that could put them off from making a claim but if they wanted to there is nothing stopping them from doing so.

JACUSTOMER-itpwi8ao- :

Hi Ben,

JACUSTOMER-itpwi8ao- :

Hi Ben - thank you for the information which you have provided. this is very useful and I am very grateful for this.

JACUSTOMER-itpwi8ao- :

so, given the person was made redundant, does this mean that she needs to be paid her monthly salary x 2 months notice period at the full rate or, can she paid redundancy at a rate of £475 maximum x 1 and half weeks due to age being over 41

Ben Jones : As she does not have 2 years service she is not due a redundancy payment so she is due her normal wages for 2 months and that would be her notice period
Ben Jones :

I hope this clarifies your position? If you could please quickly let me know that would be great, as it is important for us to keep track of customer satisfaction. Thank you

Expert:  Ben Jones replied 3 years ago.
Hello, I see you have accessed and read my answer to your query. Please let me know if this has answered your original question or if you need me to clarify anything else for you in relation to this? I just need to know whether you need further help or if I can close the question? Thank you