Owed 2 yrs wages by liqudated company

bryce · Dec 15, 2008

Hi all,

I had been working for a family company for a couple of years which is now in liquidation due to a family fued. This was in October 2006 and is still on going.

For the last 2years of that company trading and myself working for it, I never took a wage. Being a family company We/ I prefered to leave the money in the company unless we needed it, and when we did, we'd get it. ie. Deposit on house.

Due to the fued and liquidation, I am now owed 2 years wages of which I fear I may not get. The only real evidence I have of hours worked is in my diary.

I am down as a creditor of the company, but the liquidator seems quite dismissive. They wrote to me recently asking for evidence of my claim.

What do I do?

I should add, Im not a share holder / partner / director in the company. Just simply an employee.

Thank you

Bryce

KidsBeeHappy · Dec 15, 2008

As an employee you should start with ACAS, and persue the employment route. There are time limits on this though so you should take advice quickly. How long is it since the liquidator was appointed?

bryce · Dec 15, 2008

Liquidator was appointed January 2007

I was sent a form about redundancy I think it was, and due to the length of time Id been working - I was entitled to measly few £hundred.

KidsBeeHappy · Dec 15, 2008

OK. Thats not so good, most employment cases need to be raised within 3 months, when did you actually stop working for the company?

bryce · Dec 15, 2008

Turn of 2006/2007.

I figured Id be OK as a creditor? Or does it not work like that as I was an employee?

Dec 16, 2008

I would take it up with the family and escalate the fued to a level they are not expecting.

Talk about honour among thieves.

Earl

stevesolo · Dec 16, 2008

Normally if you're on the payroll and the company goes into liquidation, you come top of the pile for any unpaid wages. The difficulty here is whether technically you were on the payroll at all. Do you have anything in writing to show what you should have been paid over the two years and that you agreed to defer it?

The other issue is that if the liquidator was appointed in Jan 2007, he would normally have finished his process by now. I think you may have left it too late. Try ACAS as boxby suggests.

bryce · Dec 16, 2008

Normally if you're on the payroll and the company goes into liquidation, you come top of the pile for any unpaid wages. The difficulty here is whether technically you were on the payroll at all. Do you have anything in writing to show what you should have been paid over the two years and that you agreed to defer it?

Steve, I was on the pay roll - my slips show nil though. They dont show £xxx.xx and I just didnt recieve them.

There's nothing in writing. This is where its difficult - due to it being family it was all just an 'agreement' between us all, never seen a need to write it down as we didnt see this fued happening.

Zeno · Dec 16, 2008

bryce said:
Steve, I was on the pay roll - my slips show nil though. They dont show £xxx.xx and I just didnt recieve them.

There's nothing in writing. This is where its difficult - due to it being family it was all just an 'agreement' between us all, never seen a need to write it down as we didnt see this fued happening.

What did you base the calculation of your wages due on then? - Did you have an hourly rate?

JustOneUK · Dec 16, 2008

The company went into liquidation 2006/2007 and the liquidator was appointed Jan 2007 - how come your claim has taken so long? The liquidator should have known about your claim some 23 months ago :|

Have you literally only just decided to claim?

babs003 · Dec 16, 2008

JustOneUK said:
The company went into liquidation 2006/2007 and the liquidator was appointed Jan 2007 - how come your claim has taken so long? The liquidator should have known about your claim some 23 months ago :|

Have you literally only just decided to claim?

I have to agree why now ?

bwglaw · Dec 16, 2008

bryce said:
due to a family fued...

I prefered to leave the money in the company unless we needed it, and when we did, we'd get it. ie. Deposit on house.

This sounds rather unusual for a genuine employee. 2 years is a long time to go without pay unless you was only working a few hours here and there.

Due to the fued..., I am now owed 2 years wages...

Does not sound like a genuine claim for unpaid wages. Sounds like there are personal underlying issues.

Just simply an employee...

You do seem to be a volunteer as far as facts given go but as you are a family member it may be difficult to prove there was an intention to create legal relations by the way of a contract of employment in return for renumeration.

Blunt the above may be but this is probably what the Liquidator had sensed.

bryce · Dec 16, 2008

What did you base the calculation of your wages due on then? - Did you have an hourly rate?

I kept a diary with my hours, and have an hourly rate from when I had been taking wages.

The liquidator should have known about your claim some 23 months ago :|

Have you literally only just decided to claim?

No I havent just decided recently, I forwarded myself as a creditor in early 2007. Cant remember the exact date, but maybe 2/3month from the appointing. The wrote to me a few times during summer 07, but then seemed to dismiss me thereafter. I tried contacting them by phone, and they would not return my calls. December 2008 is this first Ive heard from them since summer 07.

This sounds rather unusual for a genuine employee. 2 years is a long time to go without pay unless you was only working a few hours here and there.

As I didnt need the wage at that time, I left it within the company. This did not mean I didnt want it or am not due it.

Does not sound like a genuine claim for unpaid wages. Sounds like there are personal underlying issues.

What do you mean?

You do seem to be a volunteer as far as facts given go but as you are a family member it may be difficult to prove there was an intention to create legal relations by the way of a contract of employment in return for renumeration.

Are you saying that because I am a member of family as well as an employee, it could just look as if I voluteered my time. ie wage free?

I could understand this if I was a director or share holder, but Im not.

Zeno · Dec 16, 2008

I think the general consensus is that your situation is complicated by the time elapsed, the family issues and the lack of known detail. It was an odd thing for an employee to do is what it boils down too.

The trouble is if your payslips are all for nil, there were no contracts, agreements or P60 then the liquidator was right to ignore your claim - it would be near enough impossible to establish the debt in the eyes of the law.

I would say your possible redress would be to talk to the owners of the company (your family I presume) and tell them your feelings on the matter - you worked for two years in good faith with nothing to show for it. You would have no legal claim but maybe the will agree to pay you something?

I

bwglaw · Dec 16, 2008

Some of the facts you have given does cloud the employee relationship, such as, leaving the 'wages due' in the company and claim it as and when you need it. Understand if a Director did this, but not a person who claims to be an employee.

Whether you are an employee or not is likely to be a contentious issue. Do you have any evidence at all that you are an employee for renumeration, if so what hours were agreed and how many hours are to be paid to date?

Any entitlements you may have will be a question of fact, and the facts thus far, in my opinion, do not go in your favour. I appreciate you may have other evidence in your possession therefore you are best advised to seek legal advice locally.

bryce · Dec 16, 2008

Zeno said:
The trouble is if your payslips are all for nil, there were no contracts, agreements or P60 then the liquidator was right to ignore your claim - it would be near enough impossible to establish the debt in the eyes of the law.

I would say your possible redress would be to talk to the owners of the company (your family I presume) and tell them your feelings on the matter - you worked for two years in good faith with nothing to show for it. You would have no legal claim but maybe the will agree to pay you something?

I was on the pay roll, whats to say I cant take my wage weekly/monthly/yearly?

The reason the company is in liquidation is because of a fued, therefore noone is agreeing on anything. None of the share holders will pay me out of their own pocket.

bryce · Dec 16, 2008

bwglaw said:
Some of the facts you have given does cloud the employee relationship, such as, leaving the 'wages due' in the company and claim it as and when you need it. Understand if a Director did this, but not a person who claims to be an employee.

Whether you are an employee or not is likely to be a contentious issue. Do you have any evidence at all that you are an employee for renumeration, if so what hours were agreed and how many hours are to be paid to date?

Any entitlements you may have will be a question of fact, and the facts thus far, in my opinion, do not go in your favour. I appreciate you may have other evidence in your possession therefore you are best advised to seek legal advice locally.

An employee with potential to become a share holder. Why would it not make sense to leave it?

There were no hours agreed due to the type of company it was and the works it did. One director will agree to the hours Ive claimed, I doubt the other will.

I appreciate you may have other evidence

This is where Im struggling. Due to the whole set up of how things were, all I have is a note in my diary as I could never have foreseen this situation.

bryce · Dec 16, 2008

Thank you all for the advice so far.

stevesolo · Dec 16, 2008

Hi Bryce

I am still puzzled. I suppose you could have capitalised what you were owed in wages at some point into shares.

Did everyone lose everything in the liquidation? Was there any form of distribution to creditors?

I don't think you've got any chance of getting anything out of the company / liquidator - your only recourse would be against the directors / shareholders of the company if you were treated in a way that could open up a claim for compensation or damages.

In your present position, maybe you should consider consulting a lawyer if you think it will be worth it at the end of the day. But it will cost you initially, I suspect.

bryce · Dec 16, 2008

Not taking a wage helped with cash flow. As an employee it doesnt make sense, but in a family business it does.

Funds havent been distributed to creditors yet.

Did everyone lose everything in the liquidation?

Who do you mean by 'everyone'? Directors / shareholders?

The company was cash and asset rich. The liquidator seized all assets and funds.

Thanks.

Zeno · Dec 16, 2008

bryce said:
I was on the pay roll, whats to say I cant take my wage weekly/monthly/yearly?

The reason the company is in liquidation is because of a fued, therefore noone is agreeing on anything. None of the share holders will pay me out of their own pocket.

What should have happened was that your wages every year were declared and then credited to a loan account in the companies financial statements. That way the company would have got tax relief on the wages and you could have drawn the money at any time the company could afford it.

This is a fairly common practice for owner managed companies however it is pretty unusual for someone who is just an employee to not draw their wages.

I am afraid you may have to put this down to experience and move on. How much are we talking about?

bryce · Dec 16, 2008

Zeno said:
What should have happened was that your wages every year were declared and then credited to a loan account in the companies financial statements. That way the company would have got tax relief on the wages and you could have drawn the money at any time the company could afford it.

This is a fairly common practice for owner managed companies however it is pretty unusual for someone who is just an employee to not draw their wages.

I am afraid you may have to put this down to experience and move on. How much are we talking about?

Hein sight's a great thing.

Its looking like it'll have to be down to experience though, unless someone comes up with summit!

Id rather not say how much it is. Its substantial though.

Cookie Consent

Essential

Analytics

Marketing

Owed 2 yrs wages by liqudated company

JustOneUK