What should I do if I think that my employer is in financial difficulties?
This will depend upon your position within the business and the relationship you have with the senior management team.
A direct approach to management may provide you with some indication of whether there is a problem and the severity of the position. However, this approach may be unsuccessful if management have been advised not to provide details to parties outside the senior management group.
If you are a member of a union then it may be appropriate to raise your concerns with your representative who could approach management and look after the interests of the workforce as a whole.
If it is evident that there is a significant problem you could consider the following to protect your position as an employee.
If you are paid monthly in arrears and it is early in the month you could request that you are paid weekly. If your position is critical to the business you may be able to negotiate payment in advance;
Do not give credit to the business – ask for a float for expenses, do not incur them or make very regular reclaims so that your risk is minimised;
Consider what other jobs there are in the market - if there is a large number of employees you may benefit from a head start should the business be closed or employees made redundant; and
Plan for the eventuality. Consider what impact it would have upon you and your finances and have a plan in place that would minimise the effect. Examples could include giving notice on savings accounts that cannot be accessed quickly so that money is available to meet vital payments, establishing what would need to be done to take a mortgage holiday and completing the paperwork so that should it be necessary it can be implemented quickly, etc.
What you shouldn’t do without approval of management:
Tell customers or suppliers of your suspicions – whilst some may offer support, others may take action to protect their own position. If the business is in difficulty this could have an adverse effect upon the business and the possibility of its rescue. Should the suspicions be unfounded then this action could cause the business to lose customers and may actually increase the likelihood of failure.
Remove any of the business’s assets even if you are owed money. This may be viewed as theft.
Spread the rumour through the workforce. Again this may be counter productive.
One of the main things if you find yourself in this position is not to panic. As an employee your position, to a certain extent, is protected because certain claims on the event of your employer’s insolvency may be met by the National Insurance fund.
link to what can be claimed and how
