Thank you for your responses I really appreciate it as Ive never been in this situation before.
Seanie did you continue to trade while making your staff redundant and the re-appoint them? Jim if I was to appoint a liquidator there isnt enough to pay suppliers and the state what happens in that situation. ?
As the process of the state paying them their redundancy lump sum takes such a long time should I be upfront with the lads and start progressing this sooner rather than later. I would still like to continue trading and keep the lads for another 18months or so until my state pension kicks in but I dont know if the business can hang in that long...
Hi,
I have run my own business for the past 10yrs with 4 other staff members. They have been on a 3 day week on and off for the past 3 years, more on than off to be honest. I am reaching retirement age later this year and have been keeping the business going on my savings for the last 3 years. The business has no money to pay out redundancy potential 60K. All their tax contributions are paid up todate.
I want the lads to get their payouts but I dont know how to go about it. Do I close the business, liquidate it, strike it off? I want to retire not owing any money and will make sure suppliers etc are all clear. Do I tell the lads my plan and give them a years notice?
Any advise offered would be greatly appreciated as I am just prolonging the inevitable at this stage.
Except for the bit about paying off suppliers before employees (assuming that he's referring to statutory redundancy).On this thread I feel gracey is trying to be very fair to all
If you're talking about statutory redundancy, you might clarify how you worked out that it's OK to pay suppliers their full debts but not employees?
Sorry to hear that things aren't going well.
First of all, you might clarify if you are talking about statutory redundancy, or something more than that.
If you're talking about statutory redundancy, you might clarify how you worked out that it's OK to pay suppliers their full debts but not employees?
I suspect you're right, and I asked the question to get confirmation of this.Because the social insurance scheme will pay the employees their dues but not the suppliers so this way everyone gets paid.
I'd say you're right, but I asked the question just to be sure, as it would completely change the answer if he was talking about payments over statutory.I'd say it's a pretty safe bet that it's only statutory redundancy the guy is talking about, given the circumstances.
I'm no legal expert, but I understood that one of the major concerns of receivers or liquidators that can end up in recommendations for restricting directors was where directors were seen to favour one debtor or class of debtors over others.Re: the emboldened bit, until the day that he decides to call a creditors meeting to cease trading and wind up the company, the OP has the obligation to pay his suppliers for his purchases, and his employees for their work. Your post implies that somehow an employer should have a reserve of cash set aside somewhere to pay staff statutory redundancy in the event of the business going under, which is pretty nonsensical from a real world commercial perspective - since any company with enough cash to set aside for that isn't going under. He only incurs the liability to the redundancy when the lads cease to be employed, which is when he makes the decision to wind up. Until that date he should continue to pay his creditors in the normal way, just as he should the employees' wages, and the fiduciary taxes.
I inferred that from the following statements in his post;And you might clarify how you've decided from what the OP said that he has "worked out that it's OK to pay suppliers their full debts but not employees?" - as I don't infer that from his posts...
Hi,
I have run my own business for the past 10yrs with 4 other staff members. They have been on a 3 day week on and off for the past 3 years, more on than off to be honest. I am reaching retirement age later this year and have been keeping the business going on my savings for the last 3 years. The business has no money to pay out redundancy potential 60K. All their tax contributions are paid up todate.
I want the lads to get their payouts but I dont know how to go about it. Do I close the business, liquidate it, strike it off? I want to retire not owing any money and will make sure suppliers etc are all clear. Do I tell the lads my plan and give them a years notice?
Any advise offered would be greatly appreciated as I am just prolonging the inevitable at this stage.
There is a clear intention to continue to pay money to suppliers and not provide for redundancy for employees. Indeed, there is an expectation that someone else (the State) will step up to pay redundancy for the employees.Hi,
The business has no money to pay out redundancy potential 60K.
I want the lads to get their payouts but I dont know how to go about it. Do I close the business, liquidate it, strike it off?
I want to retire not owing any money and will make sure suppliers etc are all clear.
Not true - he explicitly states his intention to pay off suppliers but not provide for his liability to employees.he simply says that he won't have enough money to pay everyone everything.
Yes, I agree that he's in a horrible situation, and I recognise that he's worked hard to provide employment in difficult circumstances, and that he is funding the business out of his own pocket.I think the OP is in a horrible situation, is ASKING how best to deal with it fairly (you'll note his primary concern in starting the thread is for his employees) and the tone of your comment is very patronising.
I'm no legal expert, but I understood that one of the major concerns of receivers or liquidators that can end up in recommendations for restricting directors was where directors were seen to favour one debtor or class of debtors over others.
The point about the timing of the liability is, from a business point of view and an ethical point of view, a moot point. The owner knows this liability exists and is coming down the line, as evidenced by the posting here in the first place. Any pretence otherwise is just that - pretence.
But none of that entitles him to put suppliers before his liability to employees.
That doesn't surprise me, but would you like to expand on your comment about the receivers. I'd have assumed that by the time the receiver gets involved, they have little or no choice or discretion, because the money is gone - or perhaps I misunderstood something? Or do you mean that they don't bother reporting this as a directors offence?The reality of business in this country is that this happens all the time, and receivers are quite happy to facilitate it.
Everyone except the State who is left to pick up his liability to his employees.I wouldn't have a go at the OP, who is clearly trying to do the best they can to do the right thing for everyone concerned.
Everyone except the State who is left to pick up his liability to his employees.
I'm a bit lost on this. The workers are entitled to statutory redundancy and will be paid by the state, from the contributions made over the years. So there is no issue surely?
Employer rebate abolition: From January 1st 2013 the employer statutory redundancy rebate was abolished. Where the date of dismissal occurred in 2012 the employer rebate is 15%. If the date of dismissal was in 2011 or earlier the employer rebate is 60%.
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