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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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My employer is closing the business and I have been given no

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My employer is closing the business and I have been given no notice or redundancy pay.
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 1 year ago.
Background information:My Employer: Jadecroft Services Ltd (JC) -
JC was formed by my father Ian Middleton (IAM) and it's only director is Mrs Christine Middleton (CHM) CHM is Ian's wife. She does not control the company in practise only on paper. In fact the person who controls this company is Ian Middleton (IAM).Jadecroft was setup as a machine to process the payroll for another company DA International Air Support. (DIAS)
DIAS has two directors, both myself (SM) 10% and CHM 90%. Again the company decisions were made on the whole by IM and both CHM and SM are only on paper as being in control of DIAS.On a monthly basis DIAS would pay JC amounts to cover the payroll and recently DIAS has ceased trading. I am aware of IM's intention to fold the company leaving me unemployed. I have been given no notice and or any redundancy package.I have been employed by JC since Jan 2012. JC has no assets or money to speak of. DIAS has over £1m in assets.Where do I stand exactly? As this is a family business it only adds to the complication of the issue.

Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.

So you are not directly employed by DIAS?

Customer: replied 1 year ago.
Customer: replied 1 year ago.
My payslips are from JC but 100% of my day to day dealings are performed under the DAIS banner
Customer: replied 1 year ago.
How does my relationship with each company effect each other? If I resign as director do I get to keep my shares? Can my shares be taken off me? Are there any implications to me resigning as director of DIAS?Registered Director of DIAS
10% Share holder of DIAS
Employee of JC

Hello, sorry I was offline by the time you had replied. Just so you know there are two separate issues here – the employment aide and the corporate one. I can advise on the employment issues but as corporate law is completely separate you would need to seek separate legal advice on that. Sl anything to do with directorships and shares will need to be discussed with a corporate lawyer separately.

As far as the employment position is concerned, the closure of a business is one of few specific situations which satisfies the definition of redundancy. Therefore, on closure you would be entitled to receive redundancy pay, notice pay, any outstanding wages and holiday pay. Which company owes you that money will depend on which was your employer. That does not just depend on which one paid you but also on which you appeared to be employed by, had control over you, gave you instructions on work, etc.

So there is an argument that you could pursue DIAS as the potential employer here as well in the event they employed you by giving you work, exercising control over you, etc. Unfortunately only a court can decide if that is the case.

Another option to legal action against the companies is that the Government could potentially cover you in the event that the employer goes insolvent. So if they are officially made insolvent, the National Insurance Fund can cover you for things like wages, notice and redundancy pay.

This is your basic legal position. I have more detailed advice for you in terms of the rights you have under the NI Fund and how to apply these, 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

Ben Jones and other Employment Law Specialists are ready to help you

Thank you. 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(###) ###-####