New Boss, New Limited Company and Unpaid Wages

tiniergiants

Hi there!

So I was working in a restaurant for about a year, and in that time, mine and everyone else at the business' wages started to clock up. It was an independent restaurant so we all knew how much money was coming in and out, and so we would only get paid sporadically, and this was fine for awhile as we liked our boss and we were all personally invested in the business. However the business changed over hands in November and became a new limited company, with two new directors/owners, and our old boss gone. A staff meeting was held where THEN we were told by our new bosses that because it was a new limited company, TECHNICALLY we weren't owed anything by this 'new' company.

We were told that they would 'endeavour' to pay us what we were owed, but that it was not their responsibility. ALL of the staff are owed money, anywhere between 400 to 2000 euro. I have left, and am looking to get my money, but I'm worried they will not pay me or they will drag it our for months, as they said we may get paid in 'dribs and drabs' i.e, 20 euro here and there. I'd rather not be calling in to the place every three days for dribs and drabs, as I as well as the other staff who are leaving soon also, are planning to move away and cannot afford to be tied to the place, as staying might end up costing more money than what we are owed if it means getting 20 euro a week for 6 months.

Now, when the changeover happened, they took over the same premises, the same suppliers and their debts, the debts for the electricity/heating etc. and ALL other debts, as well as taking over the assets - namely the expensive furnishings and whatever else existing within the premises as before the takeover.

My question is because they took over the other existing debts and assets (more importantly) am I and the rest of the staff legally entitled to our wages under the new limited company? And why exactly am I/aren't I?

I assumed because they took on all other debts, surely the staff's wages are included in that. Or at the very least, because they have the same assets, we are in some way able to claim/or push that our wages be recouped from the sale or something to do with the value of the assets that belonged to the previous company we began working for, but now belong to the new limited company.

I'd really appreciate any help you all could provide, as you understand what it's like to pour your heart and soul into a place, and to get a slap in the face like this, and not be paid for your time and energy.

davo10

How do you know the new company took on responsibility for the previous owners debts with utility providers, suppliers, rent arrears, Revenue (VAT) etc?, this would not be the norm.

Vision of Disorder

Where's your old boss gone? You should be going after him surely? Particularly if he didn't give any advance warning of the mess you were going to be dropped in.

tiniergiants

I know for a fact all debts etc have been taken on as it's a small operation and the staff that work there, including myself, know for the most part all the in's and outs. Our old boss is in jail with nothing left in his name anywhere and no other family or anything like that to chase after. i.e, no money.

Gone West

Name and shame. Probably against the rules on boards, but you could try zero star reviews on tripadvisor, yelp, and negative posts on twitter and the fraud check websites, etc.
Soon enough they will contact you offering to pay you all that you are owed.

davo10

Fuzzy wrote: »

Name and shame. Probably against the rules on boards, but you could try zero star reviews on tripadvisor, yelp, and negative posts on twitter and the fraud check websites, etc.
Soon enough they will contact you offering to pay you all that you are owed.

Hold on there a second. OP is owed money by a previous owner/company not by this new one. He/she can offer no tangible evidence bar knowing "for the most part" what goes on there. It would be highly irregular for a new owner to assume the debts of the old, the creditors would have contracts with the old and they are unsecured debts. The new owners have formed a limited company and will have arranged new contracts for utilities and supplies.

OP is owed money by a previous owner/employer, and has never worked for this new one. The new one may wish to keep experienced staff and might come to some arrangement to pay them monies owed as am incentive to stay on but they are under no moral nor legal obligation to do so as the debt is not theirs.

As this is a restaurant, the building is most probably rented so the new owners are unlikely to have bought the business nor the associated debts, they are more likely just to be the new tenants.

Again OP, before you bad mouth this new company any further, what evidence have you that the new company has paid any VAT/PRSI/rent/utilities/suppliers arrears accumulated by the old owners and on what are you basing your assumption that the newco are responsible for the wages not paid by a defunct previous owner?.

Bigcheeze

This sounds like a transfer of an undertaking that would be protected by EU TUPE regulations.

If so then the new company took on your employment contracts and owes all the accrued wages irrespective of fact it is a new entity.

davo10

Bigcheeze wrote: »

This sounds like a transfer of an undertaking that would be protected by EU TUPE regulations.

If so then the new company took on your employment contracts and owes all the accrued wages irrespective of fact it is a new entity.

It's a restaurant with a delinquent former tenent, in all likelihood, considering the sector and how frequently this happens, the old business folded and ceased to exist, the new restaurant is a new business entity with no connection to the previous one. OP can clarify this by providing some evidence to support the claim that all debts have been assumed by the new owners.

Big cheese, in opening post the OP refers to the new owners being a limited company. An Ltd has many benefits but one of the most important and frankly the main reason along with tax benefits for them being set up, is to insulate the directors from personal liability from debtors. The new owners setting this up then taking on responsibility for existing debt would be like buying an umbrella then choosing to stand in the pouring rain with the umbrella by your side, it doesn't make sense.

Mrs OBumble

Fuzzy wrote: »

Name and shame. Probably against the rules on boards, but you could try zero star reviews on tripadvisor, yelp, and negative posts on twitter and the fraud check websites, etc.
Soon enough they will contact you offering to pay you all that you are owed.

Yah, or they will be out of business totally.

And putting on my mod-hat for a second: Please don't name-and-shame here on board.ie, it's not worth the risk to the site and will be removed.

Bigcheeze

davo10 wrote: »

Big cheese, in opening post the OP refers to the new owners being a limited company. An Ltd has many benefits but one of the most important and frankly the main reason along with tax benefits for them being set up, is to insulate the directors from personal liability from debtors. The new owners setting this up then taking on responsibility for existing debt would be like buying an umbrella then choosing to stand in the pouring rain with the umbrella by your side, it doesn't make sense.

I know what a limited company is and what the benefits are. I'm also aware of TUPE regulations and how they are designed to prevent company law being exploited as a method to extinguish employee rights on the change in ownership of a business. Based on the facts in the OP, this sounds like a TUPE transfer.

davo10

Bigcheeze wrote: »

I know what a limited company is and what the benefits are. I'm also aware of TUPE regulations and how they are designed to prevent company law being exploited as a method to extinguish employee rights on the change in ownership of a business. Based on the facts in the OP, this sounds like a TUPE transfer.

The TUPE directive does not apply where the reason for the transfer is the insolvency of the transferring business.

Put simply Bigcheese, if the restaurant went out of business because the owner was bust and could not pay the bills, then there is no TUPE transfer so based on the facts in the OP it doesn't sound like it.

Having said all that, we can go back and forth on this matter but the only one who can confirm the obligations of this newco is the OP by asking for information from them. Guessing from former colleagues is not enough.

tiniergiants

Could someone explain the TUPE directive?

Also, I can assure you 100% that the company HAS taken on all former debts and arrears EXCEPT for our wages. The new owners are; the partner/spouse of the now imprisoned former boss, and our former manager. Previously the company was registered in NI, the company was then re-registered in ROI after our former boss had gone to prison, and the new LTD company was set-up by his partner, who is the one now insisting he does not owe us our money. No one HAD a contract beforehand, and we are now waiting on our contracts still. I worked for the business for 2 months after the new company was set up, and then left, having still not received a contract,copy of tax forms etc as well as my disgust at how things had been dealt with. The new owners were people I had worked with for over a year.

Bigcheeze

davo10 wrote: »

The TUPE directive does not apply where the reason for the transfer is the insolvency of the transferring business.

Let's be honest here, you hadn't heard of TUPE until I posted about it and have gone off googling it to come up with a rebuttal.

If the business is operating uninterrupted from the same premises, supplier relationships taken over interrupted, no termination of employment contracts, no declaration of bankruptcy by the owner, then it sounds very much like a TUPE transfer based on the information we have.

The fact the new company said technically they don't owe the employees because its a new company sounds very much like the actions of people armed with a little knowledge of company law who didn't take proper professional advice.

Bigcheeze

tiniergiants wrote: »

Could someone explain the TUPE directive?

There are many online articles about it:

http://employmentrightsireland.com/tupe-the-transfer-of-undertakings-directive-and-irish-employers/

3DataModem

Bigcheeze wrote: »

Let's be honest here, you hadn't heard of TUPE until I posted about it and have gone off googling it to come up with a rebuttal.

If the business is operating uninterrupted from the same premises, supplier relationships taken over interrupted, no termination of employment contracts, no declaration of bankruptcy by the owner, then it sounds very much like a TUPE transfer based on the information we have.

The fact the new company said technically they don't owe the employees because its a new company sounds very much like the actions of people armed with a little knowledge of company law who didn't take proper professional advice.

Yep. TUPE can apply for insolvent businesses by the way.

tiniergiants

Thanks Bigcheeze for the articles, and davo10 for both your help so far.

The TUPE is a good piece of information to have, but this wasn't actually a transfer to the best of my knowledge. The company, registered in NI, was dissolved in MAY '13, then registered in ROI as of mid-November '13. In the time in between, the company was not registered, although our former boss was still in charge, we knew that the company was going to be registered under the new owners/directors, it just took until November for that to happen. Our former boss was not aware that after he had been imprisoned, we would be informed that they 'technically' did not owe us any of the money we were due.

I understand that I naively continued to work in all this under the table haphazardness but I needed the money at the time, and was still getting paid for the week we worked so ... !

davo10

Bigcheeze wrote: »

Let's be honest here, you hadn't heard of TUPE until I posted about it and have gone off googling it to come up with a rebuttal.

If the business is operating uninterrupted from the same premises, supplier relationships taken over interrupted, no termination of employment contracts, no declaration of bankruptcy by the owner, then it sounds very much like a TUPE transfer based on the information we have.

The fact the new company said technically they don't owe the employees because its a new company sounds very much like the actions of people armed with a little knowledge of company law who didn't take proper professional advice.

Great post. You provided a good link for OP on TUPE, now read sixth point in "Key Aspects of TUPE Regulations", the one about insolvency and transfer.

Also, I know just a tiny bit about business, law and contracts, OP the new owners could be the long lost illegitimate offspring of the previous owner, it doesn't matter, they formed a new limited company distinguishable from the old with probably different directors. They may be paying suppliers so they can continue to get food/drink etc, this is not to say they are required to do so.

I've just read the OPs latest post, old co dissolved due to insolvency, new Ltd co formed, no transfer, no TUPE.

Diairist

If PRSI was deducted from your wages by the former boss, you might ask Dept of Social Protection what happened to these deductions.

tiniergiants

Well the situation has changed now, they're going to pay me. They just seemed to think I'm owed a lot less than I am.

When the changeover happened, where we had be previously paid a week in arrears, we started getting paid for the week that we worked. This happened one week after the changeover, so every member of staff lost a weeks wages. Management doesn't seem to agree.

I'm going to pull out my hair.

davo10

tiniergiants wrote: »

Well the situation has changed now, they're going to pay me. They just seemed to think I'm owed a lot less than I am.

When the changeover happened, where we had be previously paid a week in arrears, we started getting paid for the week that we worked. This happened one week after the changeover, so every member of staff lost a weeks wages. Management doesn't seem to agree.

I'm going to pull out my hair.

I know how you feel.

Bigcheeze

tiniergiants wrote: »

Thanks Bigcheeze for the articles, and davo10 for both your help so far.

The TUPE is a good piece of information to have, but this wasn't actually a transfer to the best of my knowledge. The company, registered in NI, was dissolved in MAY '13, then registered in ROI as of mid-November '13. In the time in between, the company was not registered, although our former boss was still in charge, we knew that the company was going to be registered under the new owners/directors, it just took until November for that to happen. Our former boss was not aware that after he had been imprisoned, we would be informed that they 'technically' did not owe us any of the money we were due.

I understand that I naively continued to work in all this under the table haphazardness but I needed the money at the time, and was still getting paid for the week we worked so ... !

Who were you employed between May 13 and Nov 13 ? Sounds like there was a transfer in May and another in November. Either way the latest company is responsible for the liabilities.

RainyDay

Did the new owners buy the goodwill of the business? Are they trading under the same name to customers?

Mrs OBumble

tiniergiants wrote: »

f the now imprisoned former boss,

I'm not sure if it's relevant or not - but what was the former boss imprisoned for, exactly? Fraud related to the business, or something unrelated?