Company Liquidation...redundancy...no funds!!!

Hi there,

I have a friend who unfortunately has been made redundant last week, as the Company she has worked for for the past 8/9 yrs. has "gone into liquidation"......

This is the edited text[protecting ID's] of the letter she was handed by her employer:

This was dated 07/01/2012, but only handed to her on 16/01/2012.

She was told verbally a week previously, and the shop was closed then.

Dear XXXXXXX

It is with regret that the company has gone into liquidation, and you are being made redundant with immediate effect.

Due to the financial position of the company, it will not be in a position to pay your 6 weeks notice payment due to you or your redundancy payment.

I enclose details of the forthcoming creditors meeting.

Yours sincerly,

Yzzzzzzz Xzzzzzzzzz.

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The above is the exact wording of this letter, only names have been changed.

Now, also enclosed in the same envelope, was a 2-page print-out from the DSP Internet web-site page regarding the Insolvency Payments Scheme, address below:

http://www.welfare.ie/EN/Schemes/RedundancyandInsolvency/insolvency/Pages/Index.aspx

Also, despite what the letter said, there was no notification enclosed regarding the Creditors Meeting, as in when where and what time, and this is the case with other employees who received the same letter and enclosures.

Needless to say, my friend was and is in shock, as there was no prior indication or sign that this was on the cards, and Christmas Trading was good. (BTW this is Retail).

To help her out, I looked up

http://www.insolvencyjournal.ie/

where I found out the information regarding the Creditors Meeting, venue, date and time.

Also, I looked up the CRO office, to check on the status of the Company, to discover that no AR was made last year, 2011....despite the fact that these were submitted every year since 2000 on date, within 30-40 days.

The last Return Registered was in 2010, due 4/10/2010, received 1/11/2010.

So, it would appear that all was not well, IMHO.

Also, there was a change in Situation of Reg Office in Nov 2011........Solicitor's Office registered as new office????

My friend is now very wary regarding what her rights are in this situation, and I would ask advice here as to how she should proceed, and how she can get those payments which are due to her?

Thank you all.

desperatedan said:

My friend is now very wary regarding what her rights are in this situation, and I would ask advice here as to how she should proceed, and how she can get those payments which are due to her?

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She can chase down statutory redundancy via the scheme mentioned above. More info here:

http://www.citizensinformation.ie/en/employment/unemployment_and_redundancy/redundancy/

I don't know if there is much more to say here?

There really isn't a whole lot more to say.

The employer has pointed the former staff towards the arm of the State that steps in to pay when the employer is insolvent - that's where the money will be coming from, and it'll be up to those agencies to get in line to pick the carcass of the company to recoup what they can. It's unfortunate, but not uncommon - indeed some businesses actually stop paying the staff weeks or even months before they cease trading, and end up owing arrears of wages as well as the rest that the OP's friend is due.

All of this detective work the OP has done, is somewhat irrelevant, I mean, it doesn't require rooting around with the CRO records to deduce that all wasn't rosy with the company in November if they went into liquidation in December...

Maybe the OP doesn't understand that all that happens if you're late filing to the CRO is a late filing fee of €100 + €3 per day, and loss of audit exemption (if applicable), and that plenty of financially healthy companies are regularly late.

mandelbrot....thank you for your advice.

I can assure you that I was not playing "detective" in this matter.

I was merely attempting to reassure a friend who is now in a desperate position. I was asked for help, hence my OP.

I was foolishly under the impression that these situations were governed by law, and that included giving employees, who are Creditors, all relavent information, including about the Creditors Meeting.

However, from the replies so far, there is an assumption that all her rights will be delivered by the Insolvency Fund.

But, AFAIK this should be processed by the Liquidator, and there are forms which need to be filled out and processed.

So, I suppose my friend should consider herself lucky that the Taxpayers have contributed to a fund which her now former employer is relying on to meet the obligations he obviously has no intention or means of now meeting.

Is there an obligation on the Employer to show accounts or can her claim be frustrated by anything which would cast doubt on the Company Insolvency?

I don't think that employees have any entitlement to information about creditors meetings or to see accounts etc. But regardless I don't think that this is really of any use/concern to her. If the company is not paying non statutory redundancy and are claiming that they cannot afford to pay statutory redundancy (a claim that others will validate) then she just needs to chase the latter up with the fund as explained in earlier links. If she has outstanding wages etc. owed then she might also want to chase these up but if the company is bust then I presume that she won't get anywhere with that. If in doubt call NERA and they will advise.

As a creditor of the company she is entitled to attend the creditors meeting where the directors must present a statement of affairs i.e. a balance sheet but not a full set of accounts.
This will likely only confirm what she already knows i.e. no money to pay her.

Fair enough - I stand corrected. But it all seems a bit pointless and distracting when obviously the company is bust and the main concern now is chasing up statutory entitlements such as redundancy (and outstanding pay?).

ClubMan said:

Fair enough - I stand corrected. But it all seems a bit pointless and distracting when obviously the company is bust and the main concern now is chasing up statutory entitlements such as redundancy (and outstanding pay?).

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Just on further investigation, or "detective work" as some would call it, can I ask for comments regarding the quote below, from:

http://www.welfare.ie/EN/Schemes/RedundancyandInsolvency/redundancy/Pages/RedundancyProcedures.aspx

Your employer must give you at least 2 weeks' notice of the redundancy using "Redundancy Notification" - section A of form RP50. On the date of the termination of employment your employer must give you a "Redundancy Certificate" - section B of form RP50 - and should pay the redundancy lump sum due to you.

If your employer has not paid your redundancy lump sum, you should apply to your employer for it using form RP 77 (available from the Workplace Relations Customer Services - see 'Further information' below). If your employer still refuses to pay it, you can apply to the Department of Social Protection for direct payment from the Social Insurance Fund. https://www.welfare.ie/EN/Secure/Pages/RedundancyForm.aspx (You apply online using form RP50) as follows:

• If your employer is unable to pay your redundancy lump sum, they should sign the RP50 and submit a letter from an accountant or solicitor stating they are unable to pay and accepting liability for the 85% (since 1 January 2012) owing to the Social Insurance Fund. Documentary evidence such as audited accounts should also be included.
  
• If your employer refuses to pay your redundancy lump sum or if there is a dispute about redundancy you can bring a claim to the [broken link removed] using the [broken link removed] and [broken link removed]. This must be done within one year of your dismissal. Then you apply for your lump sum by sending a completed form RP50 together with a favourable decision from the Employment Appeals Tribunal

Insolvency: If the company has been liquidated or is in receivership, the completed form RP50 should be sent in by the liquidator or receiver on behalf of the employees.

The application for payment from the Social Insurance Fund should be sent to the Redundancy Payments Section, Floor 2, Department of Social Protection, Block C, The Earlsfort Centre, Lower Hatch Street, Dublin 2.

You can request a form by texting “FORM REDUNDANCY” followed by your name and address to 51909 (standard text rates apply).

You can find a list of http://www.welfare.ie/EN/Schemes/RedundancyandInsolvency/redundancy/Pages/RedundancyPaymentsFrequentlyAskedQuestions.aspx (frequently asked questions about redundancy) on the website of the Department of Social Protection. Further information about redundancy entitlements is in this http://www.welfare.ie/EN/Schemes/RedundancyandInsolvency/redundancy/Pages/Guide_Redundancy.aspx (Guide to the Redundancy Payments Scheme.)

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Now, the above information is good, and absolutely confirms what has been said here by Clubman, et. (thanks).

But, I still do not know how my friend should proceed, as it says above the Liquidator must submit the RP50 Form on behalf of the Redundant Employees.

Now, as far as I understand, the Liquidator will be appointed/selected at or following the Creditors Meeting, so my friend will need to supply this person with her relevant details, to ensure her payments from the Social Insurance Fund.

Could this be done at this meeting??

Or, could she actually process her claim on-line, as shown above, and have this prepared and printed out at home, and bring it to have it signed by the Employer at the meeting.

The https://www.welfare.ie/EN/Secure/Pages/RedundancyForm.aspx (on-line form) states:

Online Redundancy Claim Form

All correctly completed online claims are given priority

Once you have submitted your claim online you must print off the RP50 form. This form must be signed by both employee and employer or employer representative in black ink.

Incomplete, unsigned or copied forms will be returned to applicant and will not be processed.

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One way or another, the Employer has to sign RP50, and submit a letter from Accountant or Solicitor stating their inability to pay.

Or does this have to be done by the appointed Liquidator, the quote above says the liquidator should submit this form.

I would welcome constructive advice please.

Many thanks.