Can my employee file a winding up petition for unpaid wages?

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A winding up petition is the toughest approach that employees can take against you as an employer and it is usually a desperate and last resort for frustrated employees trying to recoup unpaid wages, expenses and contributions to pension schemes usually once they have tried all other avenues to get paid. If you, as an employer, find yourself in this position, don’t bury your head in the sand. Ben Cowgill at The Insolvency Experts Manchester explains why it is essential to seek professional advice as soon as you realise there is a potential problem with paying your employees.

The process

Simply, an employee can serve a winding up petition against you their employer if you owe them more that £750 and they can demonstrate to the Court that your company cannot pay its debts as they fall due. Your employee will typically issue a statutory demand (a formal demand for payment in writing) for unpaid wages. You then have 21 days to pay the employee or to come to an agreement with them. If the statutory demand issued is not acted upon, the next stage of the process is a winding up petition. If the winding up petition isn’t disputed, adjourned or paid by you the employer, the Court can grant a winding up order which will force your company into compulsory liquidation. Simultaneously, the Court will appoint The Official Receiver to oversee the company’s affairs.

Contact us

If you are currently unable to pay your employees or consider this could be an issue in the future, seek professional advice from an Insolvency Practitioner immediately. Ben Cowgill will provide confidential, honest advice and can be contacted on 0300 303 8284 or via our enquiry form.