Company gone into administration question.

Simmz · 6 Mar 2018 at 15:38

Hello, quick question. Unfortunately the company I work for has just gone into administration. As I have only been there a year, I know that I would only be entitled to 1 weeks pay if I get made redundant, but does anyone know how the notice period works? I have a 3 months notice period in my contract and wondered whether this is now void, or whether I would still have to honour this if I hand my notice in?

Does it also work the same way, that if they make me redundant, do they have to make me either continue to work for 3 months, or would they have to pay me for that 3 months? I can't seem to find anything online about how the notice period works.

Thanks a lot.

Freakbro · 6 Mar 2018 at 15:41

You have to had been working there for 2 years before you are entitled to redundancy, sorry

as for the notice period, gov.uk says https://www.gov.uk/redundant-your-rights/notice-periods

4. Notice periods
You must be given a notice period before your employment ends.

The statutory redundancy notice periods are:

at least one week’s notice if employed between one month and 2 years

one week’s notice for each year if employed between 2 and 12 years

12 weeks’ notice if employed for 12 years or more

Check your contract. Your employer may give you more than the statutory minimum, but they can’t give you less.

Notice pay
As well as statutory redundancy pay, your employer should either:

pay you through your notice period

pay you in lieu of notice depending on your circumstances

Payment in lieu of notice
Your employment can be ended without notice if ‘payment in lieu of notice’ is included in your contract. Your employer will pay you instead of giving you a notice period.

You get all of the basic pay you would’ve received during the notice period. You may get extras such as pension contributions or private health care insurance if they’re in your contract.

Your employer may still offer you payment in lieu of notice, even if your contract doesn’t mention it. If you accept, you should receive full pay and any extras that are in your contract.

Obviously with a statutory Notice period of 1 week for employment between 1 month and 2 years, this doesn't seem to fall under the 2 year employment period redundancy requires

Hades · 6 Mar 2018 at 15:44

A company in administration has not gone out of business (yet). You are still employed. However whether you get paid is questionable. In your situation I would look for work immediately. There isn't much the company could do if you found new work and didn't come back to serve your notice period.

Greboth · 6 Mar 2018 at 15:53

Basically you are bound by your contract if you resign or are made redundant then you are entitled to your contractual notice. Whether you have to work this or are paid in lieu will depend on the situation of the company (how much work is in progress, if there are others that can cover your role, if the administrators are trying to sell all or part of the business etc.). The most common and probable situation will be that if the administrators make you redundant they will do without notice at which point you will be owed it in lieu.

The fact it is in administration though mean the Government guarantees your statutory notice pay. As above, due to your length of service it is only 1 week. It is also worth noting the Government only pay compensation for your weeks notice (basically your gross weeks salary minus any benefits or new earnings in your notice period). The rest of your notice period you could claim as a creditor in the administration - whether you get any money for this though is impossible to say.

Bear · 6 Mar 2018 at 15:56

Even if you do get made redundant (if you are entitled to it), it doesn't mean you get anything if the company folds as there could be no money left. You would have to make a claim from the government fund

Pawnless Endgame · 6 Mar 2018 at 18:19

I worked for a company that went bust after 7 years. Contract said that if made redundant I would begiven a month's notice. When we went bust though, we were all shown the door with zero notice. When I say zero, I mean less than 1 day! Had to go through the Insolvency Company to get my 1 month's notice pay and the 7 week's redundancy pay. As others have said though, the magic number is 2 years.

Meridian · 6 Mar 2018 at 21:12

My limited understanding (my current company is in Administration, and the company before last bit the Big One as well) is that once in Administration your employer is now the Administrators, NOT the company you signed up to. The rights you have now are solely those given by law. Your three month notice has gone the way of the dodo, and you have statutory minimum redundancy notice. But I'm not a lawyer etc.

FoxEye · 6 Mar 2018 at 23:45

Hades said:
A company in administration has not gone out of business (yet). You are still employed. However whether you get paid is questionable. In your situation I would look for work immediately. There isn't much the company could do if you found new work and didn't come back to serve your notice period.

Whether you get paid is questionable? No way in hell I'd be working for that company if them paying me became "optional"

Greboth said:
The rest of your notice period you could claim as a creditor in the administration - whether you get any money for this though is impossible to say.

That sounds like an incredibly bum deal... you are bound to keep working/ serving your notice period and may never be paid?

Surely the vast majority of people will just quit and sod the notice?

Liquidfox · 7 Mar 2018 at 15:52

FoxEye said:
Whether you get paid is questionable? No way in hell I'd be working for that company if them paying me became "optional"

That sounds like an incredibly bum deal... you are bound to keep working/ serving your notice period and may never be paid?

Surely the vast majority of people will just quit and sod the notice?

I'd be looking for another job immediately and leave as soon as I had an offer, forgetting any notice periods. You may as well stick it out whilst finding another job, potentially getting some pay is better than getting none at all.

Skiddley · 7 Mar 2018 at 17:05

This ^

413x · 7 Mar 2018 at 20:35

When I worked for a company that went bust we were all encouraged to look for new jobs. People were even applying during work.
I managed to get out with what turned out to be a couple of weeks to spare.
If I had waited who knows how long I'd have been out of work.

As above. I'd get applying immediately and with immediate start.

Greboth · 7 Mar 2018 at 21:24

FoxEye said:
Whether you get paid is questionable? No way in hell I'd be working for that company if them paying me became "optional"

That sounds like an incredibly bum deal... you are bound to keep working/ serving your notice period and may never be paid?

Surely the vast majority of people will just quit and sod the notice?

As I understand it, if you work your notice then the administrator should pay you as normal. However it is unlikely they would ever give you notice as if they make you redundant without notice then you claim is for notice in lieu. So you can claim off the Government for the statutory and a creditor for the contractual.

wedrum · 7 Mar 2018 at 21:32

Time to start filling your car with goods

FoxEye · 7 Mar 2018 at 21:55

Greboth said:
As I understand it, if you work your notice then the administrator should pay you as normal. However it is unlikely they would ever give you notice as if they make you redundant without notice then you claim is for notice in lieu. So you can claim off the Government for the statutory and a creditor for the contractual.

But the administrator is not obliged to pay you if you work your notice? Or have I misunderstood...

Actually I'm more confused now. The administrator won't give you notice but you can work your notice and they should pay you? Who's giving who notice here?

Greboth · 7 Mar 2018 at 23:08

FoxEye said:
But the administrator is not obliged to pay you if you work your notice? Or have I misunderstood...

Actually I'm more confused now. The administrator won't give you notice but you can work your notice and they should pay you? Who's giving who notice here?

Serves me right for trying to reply quickly.

If the administrators want you to work your notice then yes they are obliged to pay you. If they don’t then they can make you redundant without notice. You’re then owed it lieu and can claim your statutory notice period from the Government and any remaining contractual notice as a creditor.

It has been a while since I had any experience with redundancy so I may be wrong but this is how I understand/remember it.