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Case Study: Construction Firm

Construction firm

Following the failure of his building contractor business Mr Davis contacted his local Insolvency Practitioner recommended by his accountant. The Insolvency Practitioner advised that whilst Mr Davis was due a claim it would be unlikely that he would receive anything because he was a 100% shareholder and did not have an employment contract. Mr Davis decided to clarify the matter with his accountant who could not advise on the issue because he had no knowledge that directors could even claim and had never come across it before.

Mr Davis therefore was considering not making a claim because he believed it was likely that he would be rejected. In order to make sure he received a market rate for the liquidation Mr Davis contacted a larger national firm of liquidators. They immediately advised he should speak to CFS Redundancy Payments and their team of experts.

Mr Davis was advised of his rights under the Employment Rights Act 1996 and that due to the progression in case law since 1996 the fact that he was a 100% shareholder and only had a verbal contract of employment was almost irrelevant with regards to the weighting applied to these legislative tests in the application process.

Mr Davis had 15 years of service and due to his age, 61, he was able to apply for and successfully claim £14,000 through CFS Redundancy Payments.

These funds were incredibly important to Mr Davis who was able to use them to settle personal guarantees he had inadvertently signed with several of his trade supplies when opening their standard credit agreements.

Mr Davis was able to make a successful claim because he chose to work with a firm that understood the legal framework and case law which surrounds making an application for redundancy and other statutory entitlements to the Redundancy Payments Office.

Many directors don't consider themselves to meet the criteria and don't claim when they have a legitimate right to.

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