Redundancy

[neg213]

If a company goes into administration and makes some of it's employees redundant, (and keeps some of it's workforce whilst the administrators sell off the business) can it legally not pay redundancy pay to those it has laid off?

http://www.thisisbolton.co.uk/display.var.8820 57.0.jobs_shock.php

[Miss Zippy]

I won�t comment on the specific case you�ve highlighted, but generally speaking where an employer is insolvent, redundant employees do not lose out financially. Provided an employee would ordinarily be entitled to a redundancy payment (eg, they are eligible due to length of service and being under a contract of employment), their redundancy payment (together with any unpaid wages and holiday pay due) will be paid by the Insolvency Service Redundancy Payments (which is funded by National Insurance contributions).

[neenynanu]

I thought that when a company goes bankrupt, they sell all their assets and the money from this goes to investors and shareholders first, then trickling down the grapevine of people they owe money to with staff relatively low at the bottom of the food chain.

Because all stuff (computers etc) are sold second hand, most often there is not enough money to pay everyone so the people at the bottom of the food chain don't get anything... so that would explain people not getting redundancy. I have mates who have had their comps go redundant and not got a penny. It's awful but it happens!

[Miss Zippy]

The taxman is always the first in line for payment when a firm/company goes bust, then it will be preferred creditors. Shareholders/investors and staff are at the bottom of the payment food chain