Redundancy Question

solway

Hi all,if an employer cannot afford to pay redundancy but is not gone into recievership/liquidation who pays the employee. I am in this situation and my solicitor tells me that the government can only step in and pay the lump sum if the company is insolvent. I have a few quid in the bank account but not near enough to pay the employee the full amount. I thought that the government(SIF) pay the lump sum and the 40% is paid back by company over time. What i cant make out is if a company is insolvent how can it pay back the 40%. I was also quoted E200 AN HOUR plus 21% vat for a solicitor in employment law. Is this right or am i been taken for a ride.

Kannon

If you can't afford to pay the redundancy lump sum then its likely you are insolvent, i.e. you have a liability that you can't pay.

You have it the wrong way around. The employer pays the lump sum, and then claims the rebate back from the DETI.

It depends. A partner would charge 250 - 600 plus VAT per hour, depending on the size of the firm. However a qualified solicitor, say in a small firm, may cost 100-200 plus VAT. I may be wrong about the upper limit.

gerrycollins

solway wrote: »

Hi all,if an employer cannot afford to pay redundancy but is not gone into recievership/liquidation who pays the employee. I am in this situation and my solicitor tells me that the government can only step in and pay the lump sum if the company is insolvent. I have a few quid in the bank account but not near enough to pay the employee the full amount. I thought that the government(SIF) pay the lump sum and the 40% is paid back by company over time. What i cant make out is if a company is insolvent how can it pay back the 40%. I was also quoted E200 AN HOUR plus 21% vat for a solicitor in employment law. Is this right or am i been taken for a ride.

is your company in recivership or under going liquidation process? if so the person doing this is responsible for winding up the company including arranging to pay you employees their outstanding wages and redundancy.is the company a limited or sole trader etc?

if on the other hand your company has just stopped trading and there is no more work then you can act somewhat.for a clean break and for free

first register with the revenue that your company has ceased trading. This will stop any build up of expected VAT and PAYE/PRSI receipts to the revenue and will save off any fines.

Next pay any outstanding wages that you can if any.

Any funds/assets can be divided up between your creditors if any. This is basically what a liquidator does.If you have any debtors then contact a debt collection agency to help you.

now apply online to the DETI website for the redundancy payment for your employees. The site explains all and tells you what next steps you need. Also you need an accountant to confirm in a letter that you have no "hard cash" available to you, hence why you have sold your assets to pay your debts.However outstanding debtors could add to the mix.

Your employees need to sign as with yourself the paperwork and send it it. The waiting time is now greatly reduced but do as much on line as you can it will speed up the process.

Your company is now liable for 40% of the total redundancy figure however I know business that have never been asked for it but thats a personal opnion not fact. In the mean time you remployees will get their redundancy money.

You cannot however not apply for outstanding wages for your employees as this must soley be done by a liquidator.

hope this helps

solway

cheers,thanks for the help.