Closing a business

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maggiemay1952

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We have two business's and are in our 70s. My husband built them up when he was working full time and both made a good living, however he only works a half day per week now to deal with his long time customers, I had my own job until I retired . For the past few years it's been impossible to get new staff and the ones who are with him longest are all part time all but one. One of the business's only opens for three days a week now as it was more expensive to open a full week and staff don't want to work a full week anyway. The staff we have don't seem to want to work much anymore...they come in late and leave when they want withe the result that business is bearly ticking over. My husband is making himself sick with stress and worry and we cannot see a way to close up without having to pay redundancy. The full time worker has always said he would take over the lease of the shop he works in if we ever wanted to give up so that would probably leave us not having to pay his redundancy if he agreed. That leaves the staff in the other business and even if someone bought the lease of that premises it wouldn't be enough for us to live on and pay everyone off. Can anyone give us an idea of where we stand.
We would be grateful for any advice!
 
If you decide to close the business, the employees are entitled to redundancy from you at statutory rates.

If you don’t have the means to pay them, you (and they) can apply to the state’s Redundancy Payment Scheme but you would need to provide evidence of your inability to pay.

If someone else takes over the business as a going concern and the staff were retained, you would avoid a redundancy situation but this may raise other issues regarding the conditions of any sale/handover agreement.
 
I'd get a hold of the staff behavior first. If they don't conform, give them warnings. If they continue not to conform, give them final warnings. They may then leave of their own volition.

I'd assume the full-time person is a de-facto manager. Have them provide weekly reports along with all staff signing in and signing out daily. If they are on an hourly rate, deduct hours that they are not working.

See if the full time person is interested in buying the business, let then know that you plan to put feelers out in the trade. (Your accountant can do that)

But managing the staff and ensuring they are working for what they are paid to do is the first step
 
peemac said:
If they continue not to conform, give them final warnings.
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The OP would need to be careful in this regard. There’s an incremental process to be observed before you threaten final warnings. The WRC has a code of practice on grievance and disciplinary procedures that should be observed in the absence of a company specific alternative.
 
maggiemay1952 said:
My husband is making himself sick with stress and worry and we cannot see a way to close up without having to pay redundancy.
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This is a real killer.

Good employers who have held onto their staff for years are saddled with a huge redundancy bill. If you have a limited company, you can let it go insolvent and let the state pay it. But if you do not have a limited company, you are personally liable.

You need a good HR advisor to advise you on the options. Have the employees reached retirement age? Can they be required to retire? Probably not if you don't have a retirement age in the employment contract.

If the business is losing money, you can sit down with them and tell them that you need them to start earning their keep. Again, you have to do this with a HR advisor.
 
Brendan Burgess said:
But if you do not have a limited company, you are personally liable.
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If you don’t have the funds, the employees can still be paid through the Redundancy Payment Scheme. The Department of Social Protection is obliged to pursue the employer but is able to accept repayment in instalments.

Redundancy Payment Scheme

The Redundancy Payment Scheme makes statutory redundancy payments from the Social Insurance Fund to an employee where an employer is unable to make a statutory redundancy payment.
www.gov.ie www.gov.ie

This might be preferable to trying, in your 70s turn a business around an underperforming business.
 
Sounds like you have two separate sets of problems:

1) Exiting the businesses
These seem relatively straight-forward. You sell business #1 to the full-time worker (or a higher bidder, if you can find one). If possible you sell business #2 as well. Perhaps your full-time worker from business #1 would also take it? Even if you only get €1 for business #2, that at least gets you off the hook for redundancy payments. If you simply can't get anyone to buy business #2, bring in a no-nonsense HR consultant. Some staff may then quit, some may raise their standards, either would be good for productivity and the bottom line. In the worst case, if you did have to offer redundancy payments for business #2, have you calculated how much they would cost? Would the sale of business #1 cover them?

2) Personal finance
You mention the worry about not having enough to live on. Of course that's a complex question and you haven't provided information about your living costs, etc, but a few possibilities:
- Rent a room scheme can bring in up to €14,000 per year tax-free
- Can your husband provide services directly to a few select long-term clients from home, without the cost of premises or the stress of employees?
- Have you calculated what income you need to support your lifestyle? And where there might be ways to reduce your monthly expenses?

[Edited to clarify that I'm not trying to hint at pursuing constructive dismissal, just suggesting that the owners have someone help them maintain reasonable standards and expectations for employees, as an employer is morally and legally entitled to do]
 
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T McGibney said:
Is this meant as some sort of sick joke?
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It is not. Let me explain:

I am taking OP's claim that the staff are coming in late and leaving when they please at face value.

In my opinion, an employer should be allowed to simply give such staff their last pay check and tell them not to come back. But in Ireland that's not allowed hence the need for a HR professional to deal with the problem. In theory the employer could deal with it themselves, but it's legally complex.

Perhaps "Highly disagreeable" is excessive. I just mean someone with a strict no-nonsense attitude, who won't get pushed around.

I am aware and respectful of the fact that others have different outlooks on employment relations, which is off-topic. On topic, it's in the OP's interest to have someone tough to represent her and fight for her interests.
 
gaelic_oc said:
Perhaps "Highly disagreeable" is excessive. I just mean someone with a strict no-nonsense attitude, who won't get pushed around.
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You should have said that first time around.

Telling someone in a vulnerable position that they should constructively dismiss their staff is reckless advice that falls well short of the usually high standards of AAM.
 
Gaelic has clarified the position.

But it sounds like a small business. The management will fall to the owner. You can't really have a HR person. Maybe a part-timer. Not sure what that would achieve.
 
I forgot to say one of the part time staff was signed off sick for two months and on the day , last week that she was to come back we received a cert for another two months.
Thanks to everyone for the input, it's really appreciated but a lot to think about.
 
maggiemay1952 said:
I forgot to say one of the part time staff was signed off sick for two months and on the day , last week that she was to come back we received a cert for another two months.
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I presume you are not paying her for being sick? That's what PRSI is for. She can make an illness benefit claim.

I'd do a review of staff and hours worked and hours needed. Reduce hours if the business does not require them.

You could also implement short-term layoffs if necessary, but reducing hours (in a fair and equitable manner) is probably the best short-term solution. this may "encourage" a couple of them to look for positions elsewhere.

But certainly any behavior of constantly coming in late or leaving early needs to be stopped. Regular phone calls or spot checks to ensure adherence to the paid hours needs to be done.
 
peemac said:
I'd do a review of staff and hours worked and hours needed. Reduce hours if the business does not require them.

You could also implement short-term layoffs if necessary, but reducing hours (in a fair and equitable manner) is probably the best short-term solution.
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Plus 1 to this suggestion. You’re not required to maintain staff if you’ve no work for them.

You can lay them off temporarily (or place them on a shorter working week) until such time as you can consider your longer term plans. They can claim unemployment benefit for the period/days on which they’re not working. It’s not uncommon for staff to resign in this period and to pursue full time alternative positions.

Be aware however that after four weeks of lay off/short term work, the individuals have the right to apply for redundancy which can’t be unreasonably refused. Worse case scenario, you either pay their redundancy or return them to full time work but it at least gives you four weeks (at least) breathing space.

I would also agree that the staff could be better encouraged to work to the terms of their contract. Whether this would justify the expense of hiring a third party consultant to help out would depend on a number of factors.
 
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