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Employment Law question; any proper experts here
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theotherjonvFull Member
On behalf of a friend. Apologies, long, but quite a technical background.
Her firm, US owned, has basically run out of money. Press release attached, names redacted in case it creates an issue.
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Company X, announced today that the exclusivity period for its negotiations with Company Y regarding an acquisition of the Company expired late last week with no definitive agreement for the sale of the Company as a whole having been reached.
X’s business and financial condition have continued to deteriorate through the second quarter of 2015. X has been informed that Y is seeking to acquire certain of the X’s assets in a transaction with X’s lenders, who have the right to acquire those assets pursuant to the underlying debt documents. Y has indicated that it expects to employ many of X’s employees. There is no assurance that any such transaction will be completed, and, if completed, the proceeds of such a transaction are not likely to be sufficient to satisfy all of X’s obligations to its lenders and other creditors, and are not expected to result in any payment to X’s shareholders.
X expects that it would need additional funding to continue operating beyond June 30, 2015 but does not anticipate obtaining adequate funds from its current lenders or otherwise. Consequently, X intends to wind down its remaining operations in an orderly manner, but it may be required cease operations entirely or seek bankruptcy protection.
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This basically happened and company X wound up its operations today.
WRT ‘expects to employ many of’ – a substantial number of her colleagues have not been offered new employment by Y, while she has. However; she has also been offered a new job at a third, unrelated company (Z) which she would prefer. So today, the last day of trading, her and her unwanted colleagues have been asked to leave their keys / phones / laptops, etc. in the office and essentially don’t bother going back.
Has she and her colleagues been made redundant? Effectively or otherwise? She has nothing to say so other than basically an email where she was told the company’s closed and leave your bag at the door. She has the option to start work with Z almost immediately but does entering into a new contract compromise any statutory redundancy she may be entitled to?
From my limited knowledge even if there’s no money in X then there’s a NI fund you can apply to for statutory redundancy and not to put too fine a point on it, it would come in handy, even if she could get back into employment quickly.
JunkyardFree Membershe has been made redundant due to the company no longer trading
She applies to a govt fund for her redundancy payment and starts the new job
It takes a few months to sort out and is the legal statutory minimum £430 ???per each week worked iirc – calculators are online to work it out for each personhttps://www.gov.uk/your-rights-if-your-employer-is-insolvent/claiming-money-owed-to-you
theotherjonvFull MemberSo as long as her new job doesn’t start before her old one finished (it doesn’t) and she hasn’t resigned (just told the middle company Y that she didn’t want to join them), then the fact there may only be 24/48 hours of actually being out of work – is just good luck on her part?
Fresh Goods Friday 696: The Middling Edition
Latest Singletrack VideosFresh Goods Friday 696: The Middlin...JunkyardFree MemberYes to all of that but this part concerns me
just told the middle company Y that she didn’t want to join them
This may mean she turned a job down depending on how it was worded and whether she had to and many other factors. if she refused a job offer/position then she may have not been made redundant. It will depend though as they may have say offered a job 200 miles away and you can refuse that and be made redundant etc
However if an equivalent role was offered she may have resigned. Does she have any paperwork?the rest is fine you dont have to be out of work for a certain period you just need for your position to have been made redundant
theotherjonvFull MemberThat’s the crux. Y didn’t try to buy out X, just made offers to pay off creditors in return for various bits of kit, contracts, clients, etc. If Y had taken over X completely and she refused to go then I can see that’s a resignation, but can people be sold individually in the same way? AFAIK that wasn’t the case, it was a case of if she wanted to go to Y then she could have a new job with them, but for personal reasons she opted not to.
The fact that Z then came in is maybe muddying that; bottom line X went under, she was given the option to join Y but is that an obligation?
JunkyardFree MemberPeople are not sold roles are retained. I they offer it you and you refuse then you resign. However it depends on how they worded, where the role was etc so what did they say ? She must have some paperwork which will say whether the role was made redundant and/or the company ceased to trade.
My guess is, not least as they wont be paying the redundancy, they will say the company ceased trading.
peterfileFree MemberWait until the thread has 32 posts, then just pick the response that sounds most plausible and tell your friend she should do that.
garyFull MemberI’ve been part of a similar kind of “transaction” before – all company assets transferred to a new entity, and all staff retained in their previous roles.
We also all got the statutory redundancy payment from the government, so on that basis the “Company Y” situation need not have any bearing in your friend’s case. But this was a few years ago, so rules may have changed and the exact legal status may have been different.
If the new job sounds like the place to be, I would go for it, fill in the form for the statutory payout and see what happens – as above, its not huge amounts of money so hardly worth basing decisions on.
theotherjonvFull MemberIf the new job sounds like the place to be, I would go for it, fill in the form for the statutory payout and see what happens – as above, its not huge amounts of money so hardly worth basing decisions on.
Absolutely – she already decided she wouldn’t work for Y even if they bought X out in its entirety, just not a ‘good cultural fit’ (she used slightly less ambiguous terms of one syllable) and would have resigned as soon as a transaction was completed. The fact that she was ‘offered’ the chance to join them, and by that token the choice not to (and hence be so it appears de facto made redundant by virtue of X ceasing trading) is a bit of good luck if also as it appears she has a good chance of entitlement to some statutory redundancy.
JunkyardFree MemberAgreed I think she will have the best of both worls
FWIW she must have or get soon some paperwork stating all of this and a notice of redundancy by now. I assume she is not in work today for example
theotherjonvFull MemberNope, was told to leave her stuff at the door yesterday (by email) and will be starting with Z possibly as early as next week. I think the rest of the week involves watching Wimbledon and calling the insolvency hotline……
andylFree MemberSo basically Y is just like some unrelated company coming along and saying “got a job here if you want it” and not related to X in any way? I would say that is not an issue in terms of redundancy as she is still being made redundant from X. Only an issue for job seekers allowance if there is no good reason to turn it down but it doesnt sound like she will need to go that route.
just make sure that she doesnt start of Z before she is made redundant – check to see if there is a timescale that needs to be adhered to. Make sure Z is happy with this timescale so she doesnt miss out.
brFree Member1 Start new job.
2 One day she may get some money from the old job.
3 Focus on 1.
theotherjonvFull MemberUnrelated as in no way any sort of conjoined operation, but not totally unrelated. Y made offers to buy out X but they never reached an agreement over price, and the deal lapsed:
“Company X, announced today that the exclusivity period for its negotiations with Company Y regarding an acquisition of the Company expired late last week with no definitive agreement for the sale of the Company as a whole having been reached.”
Instead, anything of value in X is now the property of the creditors (mainly one of the big banks) as per some loan collateral agreement and the bank has agreed to sell the bits that Y wants to them. Y has also offered some of the employees of X jobs, but by no means all of them (less than half, apparently)
So finally X’s business was wound up yesterday – 30/06 – including the closure of the London office. Anyone moving to Y will go to that office today, taking their phones, laptops and client lists with them; anyone not going to Y dropped their stuff at the door and said goodbye.
To me it’s pretty clearcut in that respect; she has no office, no work to do, and won’t be getting paid by X any longer. X have effectively ceased to exist. She won’t be employed by Y despite being offered, reasons as above. She has agreed to join Z, at some point in the future (ie: date after 30/06) and the fact that may be a matter of a few days is just good luck.
In time hopefully i can say who X and Y are…… ‘cos the background to why X got into trouble is quite 😯
andylFree MemberI am intrigued to know. What industry? Financial? Engineering? Medical? You mention assets – equipment? patents? products?
JunkyardFree MemberNope, was told to leave her stuff at the door yesterday (by email) and will be starting with Z possibly as early as next week. I think the rest of the week involves watching Wimbledon and calling the insolvency hotline……
Which ever company is dealing with insolvency will still need to issue notices
just make sure that she doesnt start of Z before she is made redundant
An interesting point as the company has to say what the date is it should be the date the company ceased to trade though they will be paid – holiday entitlement and notice period as well. IIRC you can start work in that “notice” period but i would get proper advice there – also depends how long you were there – is it two years or 16 years
surely all that work here or leave etc there was some written notification of this ? MY [ educated guess] is
employment ceased on 30/06
She is owed any holiday pay. notice period and redundancy from this dateShe can start work now if she likes as she clearly is no longer employed but i would want clarification form legal first – 90% certain on my advice re that
ninfanFree MemberAs there does not appear to have been any formal consultation about TUPE, it looks like her old contract with X has been unilaterally terminated without notice, so I would agree with Junkyard that she has been made redundant.
theotherjonvFull MemberAs there does not appear to have been any formal consultation about TUPE
I believe there were ‘discussions’ (whether that constitutes a formal consultation) about transferring employment to Y, at which TUPE was certainly an aspect, as part of the potential acquisition mentioned at the start.
When agreement failed on Y acquiring X, and it became a bankruptcy / sale of assets exercise I guess that becomes irrelevant. Y may have offered employees of X jobs and those offers may have been on the same terms, but our understanding of it was that it wasn’t a transfer, it was an offer to match what you’re on.
JunkyardFree MemberLord lets not start discussing TUPE
No one understands this and I have done it 4 times and read tons on it
The advice for all TUPE is it depends 😉Given there is no trading company she has to be redundant and the contract void – as the company has clearly breached it – she is free to seek employment – depending on the official redundancy date
nickdaviesFull MemberIn time hopefully i can say who X and Y are…… ‘cos the background to why X got into trouble is quite
I really wouldn’t worry about it – considering if you google the important bits of the press release you posted up there you the top 2 posts are the press release and this thread…
theotherjonvFull MemberThanks a bunch. I’m now going to ask the mods to pull this thread because I don’t want the person involved to be identifiable, and thanks to you pointing it out to all and sundry that’s now reasonably easy if you are associiated with either X or Y.
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