Withheld salary after leaving role

Kol · 3 Jun 2016 at 12:39

Hi chaps,

After a bit of advice here if you wouldn't mind. Just before the turn of the year I accepted a new role for a company, however it turned out to be very different from what was discussed. After four months with the business I handed in my notice, the statutory period (as no other notice period was indicated) being one week which I worked. I had also accrued eight days annual leave by this point. So my final salary was due to be paid last month.

However, it wasn't paid so I contacted the company (as advised on CAB) to resolve the issue on Tuesday. Wednesday passed with no response so I followed up with my superiors, along with the person responsible for payroll and heard nothing until today saying they are having cash flow issues and that senior management were not paid last month. However, they have said they would pay me once cash flow permits them to do so.

What should be the next step here? CAB advise sending a recorded letter with the previous communications along with a breakdown of monies owed, however I'm not sure if this is too strong now that they've informed me of this.

I feel that senior management not being paid is irrelevant as while they considered my role to be senior, I wasn't senior management. The hierarchy was CEO, my direct superior, me. Also, if they were not paying senior management, are they not obliged to tell me in writing (or at least notify me!) that they were not going to pay due to cash flow issues?

Any thoughts?

Jamesyboyjim · 3 Jun 2016 at 12:43

Senior management not being paid is of no concern to you, that's their problem. For all you know, its a lie anyway. Just follow the procedure that suits you. Let the company deal with its other staff members.

Gornall · 3 Jun 2016 at 12:46

Shouldn't you be using ACAS conciliation service? As opposed to CAB?

Kol · 3 Jun 2016 at 12:46

Thanks James - that's what I was thinking. I'm quite often seen as a peace maker, but not to the point where I have my good nature taken advantage of. I may respond saying that I'm sorry to hear that senior management were not paid, however that is irrelevant.

I'm not sure that argument would stand up in court.

Gornall said:
Shouldn't you be using ACAS conciliation service? As opposed to CAB?

The CAB was just for a snippet of advice, is ACAS relevant when I'm no longer employed? I'll take a look, cheers mate.

Gornall · 3 Jun 2016 at 13:06

Kol said:
Thanks James - that's what I was thinking. I'm quite often seen as a peace maker, but not to the point where I have my good nature taken advantage of. I may respond saying that I'm sorry to hear that senior management were not paid, however that is irrelevant.

I'm not sure that argument would stand up in court.

The CAB was just for a snippet of advice, is ACAS relevant when I'm no longer employed? I'll take a look, cheers mate.

If the end game is potentially an employment tribunal (past or present) then you need the certificate of conciliation from ACAS. Unfortunately I've just had to go through the same sort of scenario with a previous employer as well.

They are really friendly and helpful. Just give them a call.

Kol · 3 Jun 2016 at 13:09

Cheers buddy. Just the advice I needed really. I'll give them a call. Thanks.

danielanthony · 3 Jun 2016 at 13:27

If it's lies then is small claims court an option?

If they're insolvent then how are you going to get your money?

Kol · 3 Jun 2016 at 13:43

They won't be insolvent, they have big contracts and very few staff. I know the incomings versus outgoings. According to ACAS and a few other sites, I first have to give them the opportunity to put it right before then an employment tribunal and then court. I'm tempted to give them a bit more time now they've acknowledged the money is owed and still outstanding.

kaiowas · 3 Jun 2016 at 14:42

You need to be more forceful. If they are genuinely struggling for cash then their aim is to avoid paying anyone for as long as possible. The money they have got will go to those who shout loudest and threaten the most serious repercussions, if you go easy on them and let them know you can wait, they'll keep fobbing you off and pay other people first. You need to reinforce to them that you need this money now to pay your bills/mortgage etc even if it means making things sound worse than they are.

Quartz · 3 Jun 2016 at 15:32

If they're struggling for cash you need to get your cash before they go bust. You could threaten them with insolvency proceedings. You won't get your money if they do go bust but it will be a black mark on the directors' files.

Ayahuasca · 3 Jun 2016 at 15:57

Anonymous email threatening kneecappings.

Kol · 3 Jun 2016 at 16:54

Cheers gents. On ACAS advice I've given them until the 17th. If full payment is not received by then I will proceed with legal action.

If a company were to become insolvent, what would then happen to their 'product' ?

m4cc45 · 6 Jun 2016 at 09:02

It would be sold to pay off creditors. There's a preference order of who gets what. Basically wages are the last thing though that get paid.

M.

Pudney · 6 Jun 2016 at 12:54

m4cc45 said:
It would be sold to pay off creditors. There's a preference order of who gets what. Basically wages are the last thing though that get paid.

M.

Wages are not the last thing to be paid. Wages come after secured creditors but are given priority over unsecured creditors.

Return of assets to shareholders is last.

Gornall · 6 Jun 2016 at 13:11

m4cc45 said:
It would be sold to pay off creditors. There's a preference order of who gets what. Basically wages are the last thing though that get paid.

M.

So so so wrong... wages are very high in the list.

The following should demonstrate: http://www.companyrescue.co.uk/directors-guides-insolvency/creditors-priority

Majority of debt in most cases falls in the Unsecured category. Unless you've got security as a lender you'll be last on the list. And then each is paid proportionally based on amount owed.

Pudney said:
Wages are not the last thing to be paid. Wages come after secured creditors but are given priority over unsecured creditors.

Return of assets to shareholders is last.

Correct.

Usually done in order of assumed risk.

E.g. as an employee you shouldn't assume there is any risk to your wage. A company selling something on invoice always runs the risk of it not being paid so they understand it's lower on the priority.

boxman2000 · 6 Jun 2016 at 13:21

danielanthony said:
If it's lies then is small claims court an option?

If they're insolvent then how are you going to get your money?

I'm not up on how this works on mainland but company sounds as if it's not going to be around for long so I would try and get an official claim in so you're on the list of creditors - sooner the better.

Ask CAB but that's what I'd be looking to make sure I've done.

Hope you get it resolved soon.

john_s · 6 Jun 2016 at 14:05

The Government's Insolvency Service may cover any outstanding wages from the insolvent company - they then charge this back to the company as part of the winding up.

If they do go under, there's a form (the reference number escapes me) that the Insolvency Practitioner will provide for you to detail your claim.