Introduction
Have you recently found yourself in the difficult situation of your employer going out of business? This guide is here to help you understand your rights and the steps you can take to recover any money owed to you. From determining if your employer is insolvent to filing claims for unpaid wages, we’ll walk you through the process. If you need further assistance, Contend’s highly trained AI legal experts are ready to provide guidance and support, ensuring you have the easiest legal help in the UK. Don’t navigate this challenging time alone—let us help you find the best path forward.
If your employer suddenly goes out of business or disappears, it can be a stressful time, especially if you’re owed money. Fortunately, there are steps you can take to try to get what you’re owed. Here’s a straightforward guide to help you navigate this situation.
Understanding Insolvency
First, you need to find out if your employer is officially “insolvent.” This means they are unable to pay their debts. If your employer is insolvent, you should be contacted by an insolvency practitioner. This is a professional who manages your employer’s debts and can guide you on how to claim any unpaid wages or other owed amounts.
If your employer is not insolvent, you still have options. You might consider taking them to an employment tribunal to claim your money.
Stay Connected
It’s a good idea to keep in touch with your former colleagues. If you belong to a trade union, reach out to your representative for support and information sharing.
How to Check Your Employer’s Status
For Companies
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Find the Legal Name: Check your employment contract or pay slips for your employer’s official name. This may differ from the name they use in marketing.
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Check Companies House: Visit the Companies House register to check your employer’s status. Look for terms like “in administration,” “in liquidation,” or “bankrupt” to confirm insolvency.
- Follow the Company: If your employer is not listed as insolvent, you can follow the company on the register to receive updates about any changes.
For Sole Traders or Partnerships
- Check the Individual Insolvency Register: Visit the Insolvency Service website to see if your employer is bankrupt or has an Individual Voluntary Arrangement (IVA).
What to Do If Your Employer Is Insolvent
If your employer is declared insolvent, you can claim some of the money owed to you through the Redundancy Payments Service. You may be able to claim:
- Up to 8 weeks of unpaid wages
- Pay for unused annual leave
- Statutory notice pay
- Statutory redundancy pay (if eligible)
Applying for Your Claims
- Get a Case Reference Number: The insolvency practitioner will provide you with a case reference number (CN number) to use when applying for your claim.
- Make Your Claim: You can apply for the money through the Redundancy Payments Service. Generally, you can expect to receive the payment within six weeks of applying.
If you are also owed statutory notice pay, you will need to make a separate claim using an LN number, which the insolvency practitioner will provide after your notice period ends.
If Your Employer Is Not Insolvent
If your employer is not insolvent, you may need to take them to an employment tribunal to recover your unpaid wages or redundancy payments. Here’s what you can do:
- File a Grievance: Consider sending a formal letter or email to your employer outlining the money owed. This creates an official record of your grievance.
- Apply to the Tribunal: You have a limited time to apply—within 6 months minus 1 day for redundancy claims, and 3 months minus 1 day for unpaid wages.
- Seek Assistance: If your employer refuses to pay even after a tribunal judgment, you can still apply to the Redundancy Payments Service, although you won’t have a reference number since your employer isn’t insolvent.
Additional Support
If you believe your employer is unable to pay their debts, you might consider applying to make them insolvent. This process can be complicated and costly, so it’s advisable to seek help from a solicitor, especially if you can share costs with other affected employees.
Conclusion
Dealing with an employer who has gone out of business can be daunting, but knowing your rights and the steps to take can make it easier. Stay informed, keep communication open with your colleagues, and don’t hesitate to seek professional help if needed. For personalized guidance, try Contend’s legal expert chat. Contend’s highly trained AI legal experts will work with you to provide the assistance you need in understanding and resolving your legal problems. For more information, check out resources on GOV.UK regarding employment rights and insolvency.
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