More left penniless by business closures
Exeter Citizens Advice Bureau, is seeing an increase of people left with no wages and no money to pay their bills because of the closure of their employers’ business.
Following changes to the fee structure for employment tribunal claims, employees are left with no money and faced with an issue fee of up to £160 to lodge a claim for unpaid wages, holiday pay, notice pay, or redundancy pay, and a further fee of £230 for a hearing.
Steve Barriball, Chief Executive of Exeter Citizens Advice Bureau said: “This cannot be right. In these circumstances the employee has kept up their side of the bargain, but they are left with no money to pay their bills and then, because of changes to Employment Tribunal fees, they are now expected to find up to £390 to make an employment tribunal claim to get the money that is rightfully theirs. Such appalling treatment of employees is unfair, underhand and causing increased stress and anxiety for people who have lost their job.”
One client said: “Due to family commitments, I had to resign from my job. I waited for payday to arrive so that I could get the wages that were owed to me, but payday came and went and still I had not been paid. I contacted my employer to query this and they said that I would have to wait a few more weeks to receive the money that they owed me. Then, the next I heard was that the employer had stripped the shop of its contents and had gone bankrupt. However, a check with Companies House confirmed that the company was still trading and, because of this, I am not able to approach an insolvency practitioner to get the money that I am owed.”
Tim Davies from local solicitors, Michelmores LLP, said: Not every business that ceases to trade is made subject to formal insolvency proceedings. Even before the introduction of Tribunal fees, this caused a problem for employees who faced uncertainty as to whether they could recover money that was owed to them - but employees could at least explore the prospects of recovery, without risk, through the Employment Tribunal system. The recent introduction of Tribunal fees has created an additional hurdle in an already difficult situation.
"There is a remission scheme in place, whereby individuals on low income or certain benefits may avoid the fees, but the rules of this scheme are complex and require disclosure of a range of original financial documentation. All the while, the clock keeps ticking on the short time limit (usually 3 months) for presenting a claim to the Tribunal."
