My friend that I house share with has been made redundant from work this week. She went into work as usual on Tuesday and about half of the staff were given the news, then told to leave the premises with no redundancy package and no pay for working the month of January. That’s how seven years of employment has just ended. The company, 2E2 are still trading but it’s doubtful the employees left will receive any pay at the end of February. Can they actually just do this or will the company directors find themselves in court, and where does my friend stand legally?

Try this: https://www.gov.uk/redundant-your-rights

If the company is still trading then they have a statutory obligation to pay redundancy and their payroll. If the company has gone into liquidation then the administrators will pay it on their behalf or if funds aren’t available it will be claimed from the government
They should collectively seek legal advice.

No they can’t do that. Can seek advice from CAB or specialists on this. What is in her contract though?

Ahh, 2e2, now they are a bunch of t###s. they’ve also left a big group of suppliers high and dry as well. They’re still trading and are also still billing. I’m afraid I don’t know where this leaves your friend though.

What is in her contract though?

I would have thought that statutory obligations would override any contractual terms especially if those contractual terms are deemed unfair.

They have gone into administration. It’s in the news and easily searchable.

http://www.bbc.co.uk/news/uk-england-berkshire-21241708

Some notes here.

I’d guess that going into administration just before the salary run is an indicator that they didn’t have enough cash in the bank to pay employees.

Had a mate who had been with a co for about 5 years. I had been there about 7 months.
Work had ran out and I told them to let me go as I had an offer else where.
They got dropped to a 3 day week after that, not sure for how long but I’m sure it was about 6 weeks.
I got the lad a start where I was working and he left and the co went under owing £750k a week or so after that.
A while later the receivers got in touch and he still got redundancy even though he had left as because he had been on a short week for so long he should have been offered redundancy.

I would have thought that statutory obligations would override any contractual terms especially if those contractual terms are deemed unfair.

Only if the contractual provisions are less generous that the statutory provisions.

If it’s in administration , the directors aren’t in charge any more, the administrators are. Also, there’s probably not any money – certainly not cash to hand. They’re entitled to redundancy payments but there may not be money to pay any, let alone all.

Totally horrible for your friend and all those (and there are many) who are having similar experiences.

Why does no-one on here mention the obvious tip – JOIN A UNION? Even the most bureaucratic trade union should be able to help in a situation like this. That’s why unions were set up in the first place – to provide some protection against employers walking rough shod over folk. Not a magic solution, but……together we are stronger.

Just been through this exact scenario. Was made redundant on the 23rd November from a prominent computer games firm based in derby.
Id also worked for just over 7 years there.
We got no pay for November, no notice pay, no redundancy. Nothing. Just kicked out the door
🙁

on the plus side, after filling out all the forms handed me by the administrator, I was able to claim through the governments redundancy fund, I got my 7 years redundancy paid, as well as missing wages and holiday pay (all capped at £430 a week as statutory)
Having filled out another form, im now waiting on a claim for my 7 weeks notice pay.

So it may take a while, but your friend will get something. (but not all of what they are owed as its capped per week as stated)

The way I looked at it was I was thankful to get anything, was pleased that the fund paid out fairly quickly (5 weeks for first payment) and moved on and found another job as fast as possible.

Upside is, new job gives me friday afternoons off so more riding time on quiet trails 🙂

Why does no-one on here mention the obvious tip – JOIN A UNION? Even the most bureaucratic trade union should be able to help in a situation like this

Because it’s not obvious and in this case pretty irrelevant. Unless the union is able to stump up the cash there’s not a lot they can do. This is how administrations / liquidations work. They happen becaus ehtere is not enough cash ot keep trading, there is a hierarchy as to who gets paid from whatever cash / assests are left, at the top are the administrators and HMRC, everyone else is below that, employees are some way down the list. The only thing the unions can do would be to lobby very hard to change the rules so employees are at the top of the list and HMRC (won’t make much difference to them in the grand scheme of things compared to the devestation to an employee or small supplier) are at the bottom. Can’t see much evidence of that happening though so I don’t see unions being very relevant in theis situation.

That’s why unions were set up in the first place – to provide some protection against employers walking rough shod over folk.

Not the employers doing this, it’s the administrators applying the rules. The unions only input would be to have been more involved in how the company was being run into the ground in the first place but I don’t think they have any right to be involved at that level (could be wrong) and anyway unions don’t have a very good track record when it comes to keeping failing businesses afloat.

more advice

+1 for stumpyjohn. If the firm goes into administration as an employee owned wages you become a creditor like everyone else at which point you just have to get in line.

It is pretty rubbish for your friend though.

unions don’t have a very good track record when it comes to keeping failing businesses afloat.

No one has a good track record for doing this. I am not aware of any scenario when the union has taken control of the business though have you?

As above short term – nothing you can do
Medium terms – few mths you will get everything owed via the govt/tapayers

I am not aware of any scenario when the union has taken control of the business though have you?

To be fair no, but from the albeit limited experience I’ve had around Unions they’ve not done anything positive to slow the decline, the reverse is usually the case, they either block any changes being implemented in some vain hope of keeping their members current working practices (which are often contributing to the company’s situation) or where there is a weak and confused management team (which is also not uncommon) they panic them into even poorer decison making.

She needs to read this then get on the phone to the appointed administrators
https://www.gov.uk/your-rights-if-your-employer-is-insolvent/overview

It depends – and I declare i am a union rep- and just like managers and companies you get good reps and bad ones

I doubt a union alone could fold a company but I accept your general point

I work for one of 2e2’s suppliers, and they’ve left us an a world of s**t. We went to pick up £millions of stock that they hadn’t shipped out or paid for, and were refused access. Really sorry for your mate op, there’s a lot of people taking a hit for this, not just 2e2 employees. No advice to offer other than good luck.

If she’s been there 7 yrs she’s entitled to redundancy and wages in lieu of notice, it happened to me years ago and I had to claim it from the government after the company I worked for went into liquidation.

How much longer can this governmnet afford to bailout failing/failed companies, if the company goes bust all the asets of the directors should be seized and sold along with all the assets of the company.

So very sad for the OP,s freind though.

Project’s hit the nail on the head, surprising how many firms go under due to poor and egotistical management yet the directors are there the following day with a new company set up just before the previous one went bust.

I’ve also seen it happen where companies get their fingers burnt repeatedly by giving excessive credit to customers known to be in trouble.

Junkyard, you’re right, when union reps are good they do enhance a workplace and thankfully I do have some experience of that, when they’re egotistical it’s a nightmare for everyone.

i cant think of one firm that has been saved by a union,but then there is probably a union for crap managers and accounts departments, who dont chase debts.

like i said until managers and owners loose something like their staff do, and the government picks up their bills then falure is so easy,

If she’s an Oracle Consultant then tell yet to contact Mokum as we are looking for consultant ants at the moment.

The union issue is irrelevant here.

Project is also woefully off the mark: if the government pays redundancy benefits after insolvency, it’s not bailing out the company. The managers and owners of a failing company do lose something like the workers: the managers lose their jobs and the owners lose their company. I don’t know how it works in England and Wales but in my jurisdiction the directors can bear personal liability if the company trades while insolvent – and it has been suggested that this has led to solvent but struggling companies to be put into voluntary administration unnecessarily because directors are now incentivized to overreact to the first unpaid bill.

Have just read the letter from 2e2’s administrators to suppliers………

“As the Administrators intend to continue 2e2’s operations for the time being I would appreciate you making goods and services available to 2e2 upon existing credit terms when so requested by me or my authorised representatives.”

…good luck with that!!!

The stupid thing is, some will.

Project’s hit the nail on the head, surprising how many firms go under due to poor and egotistical management yet the directors are there the following day with a new company set up just before the previous one went bust.

Agreed.

I’ve just spoken to my wife – city employment lawyer, so she knows this stuff.

There is a government scheme for this situation. First point of contact is the administrators, who should give you the details you need. If you want information, she suggests CAB, or the governments BIS site.
Have a google of your situation – there is plenty of info out there to help.

Good luck.
Dan