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My Last Month's Salary Wasn't Paid: A Case Study

By: Maggie Lonsdale BA (hons) - Updated: 16 May 2011 | comments*Discuss
Month Salary Paid Employer Company

Liam Tyler, 31, was faced with a situation that would be enough to frustrate even the most relaxed person. When his employers, a large high street furniture manufacturer, Went Into Administration, Liam, along with many colleagues, were left out of pocket.

Talks to Restructure Failed

Liam told us, “We all knew that orders were down but we had been assured by our line manager that the company was in talks to restructure its debts, and had come to an arrangement on the massive leases for the out-of-town warehouses.”

What the employees did not know was that without the restructuring in place, the company was only two days away from administration, leaving all its employees out of work and many thousands of customers unlikely to receive furniture that they had already paid for.

Liam continued, “It all happened so quickly. We were told one morning that the company had gone into administration because they had been unable to reach a decision with either the landlord or the creditors, which meant that the business had effectively stopped, and the employees were in a long line of people waiting for money. We were given some information by the administrators, but it didn’t arrive for three days. I know that doesn’t sound like long but it seems like forever when you’ve got no idea how you’re going to pay the rent.”

Unfortunately, the information received from the administrators did little to comfort Liam, as it merely confirmed his worst fears – there was no money available and he was unlikely to receive his final month's salary, let alone any company redundancy payment in the near future, if at all.

Liam continued, “The letter said that the administrators were doing all they could to get hold of our wages and that the employees were ‘among the first’ that would get paid. It was no accident that the company went into administration two days before we were due to be paid because they couldn’t afford the wage bill. It just made my blood boil because I had worked in good faith, in exchange for the promise of my salary – that’s the deal.”

Emergency Money

Liam was not able to wait until the administrators made a decision and nor could many of his colleagues. With no savings or partner to support him in the short term, Liam felt desperate pretty quickly.

He explained, “I found the situation so hard to deal with. I was left totally high and dry because I was basically living month to month, relying on my salary, waiting for each pay day, as I know a large number of my colleagues did, too. I know that I should have built up some savings, but I barely earned enough to cover my rent and bills, without thinking of saving.”

Liam gained some professional advice through his local job centre and was able to get an emergency loan to tide him over, with statutory redundancy pay arriving in a short space of time. Luckily, the store reopened under new ownership and many of the old staff were offered their jobs back, but Liam is still fighting to get his last month's salary from the administrators.

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