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In some cases, the business can be turned around by selling company assets or by restructuring the company. In which case, your job may be safe. When an administrator takes control, they may adopt your employment rights from your original employer. You would be entitled to claim your outstanding salary and commission, accrued holiday pay up to 6 weeks and occupational pension payments owed from four months before the company went into administration.
Although you would still receive any outstanding wages and redundancy payment, there is little chance you would receive much else if you are still owed money. You need to be aware of how much you are owed and contact the Redundancy Payments Service. This claim is then made from the National Insurance Fund NIF and you can claim for your last 2 months wages and holiday pay up to 6 weeks.
You may also need to write to your ex-employer for the payment and provide evidence to your insolvency practitioner of the amount you are owed.
If the administrator adopts your employment rights during the administration period, they may also ask that you take a pay cut or defer some of your pay. If you choose to do this and the business closes down, the money lost will be included in the money owed to you.
When the business closes down, your employment rights may be transferred, which is called a transfer of an undertaking TUPE. In this instance, your rights are protected, and you are regarded as an asset of the business. The company taking over will then be responsible for paying you any money owed. However, there may be insufficient funds so you may still only receive a proportion of your debt. In this instance, it may be worth making a further claim via the insolvency practitioner with the National Insurance Fund to make sure you are protected for longer.
The content of this article was correct at time of publication. Employees who survive the initial day period as well as the administration period might find that the company is being sold to another owner or entity. In this case, your rights are also protected under the Transfer of Undertaking Protection from Employment Regulations. For employees this can be a positive outcome, as the new employers are entitled to keep you on as per government regulations.
This also protects any outstanding wages or holiday pay, or other payments you might still be owed. As the new owners get the business up and running again, you are entitled to receive any back pay or other pay you may have been forced to previously forfeit. New owners may also be forced to make changes to your existing employment contract, which can affect your new rate of pay, holiday allowance, sick pay or pension funds.
This is allowed when the contractual changes are deemed to be necessary for the overall viability and survivability of the business. Of course, new owners can also seek to fundamentally change the business around to ensure it survives and becomes profitable in the future.
At this stage however, an employee will be entitled to redundancy rights and should be able to claim payments owed to them. Employees facing redundancy need to be aware that the amount they are entitled to is dependent on several factors.
The most important factor to consider is their length of service; for most companies, you need two years of service to qualify for redundancy pay. Irwin Insolvency is ready to provide you with expert advice that could help you and your colleagues when your employer is facing administration.
Our professional team can provide you with the expertise and knowledge that you need to make the best financial claims you can. Contact Irwin Insolvency today for your free consultation. Gerald Irwin is founder and director of Sutton Coldfield-based licensed insolvency practitioners and business advisers, Irwin Insolvency.
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