But now their excuse has changed. "We're having some trouble with a slow-paying customer" they say, "but don't worry, you'll be repaid soon, the company is in good health and has a full order book". Having worked for them for a while, you don't want to make a fuss, and, you've just been reassured everything will be okay...
This scenario sounds like the start of a novel, but it's actually the beginning of something that happened to a group of workers who went without pay for many months, at a North London company called Medi-Vial, where the staff were forced to take the Directors to a series of Employment Tribunals. However, the Directors ultimately defrauded their staff and creditors out of over £1,000,000.00, by putting the business into Administration, and then buying back its assets minus any debts, thereby leaving the staff penniless.
The Directors then went on to repeat the same fraud with a whole new group of employees, using their new company called Vial Manufacturing (UK) Ltd.
What's more remarkable is that there's nothing in UK law to stop any other company Directors choosing to defraud their employees in the same manner - despite the Insolvency Service, Insolvency Practitioners, HMRC, various local MPs and the Police saying that this sort practice is unethical and exploitative.
So, the former Medi-Vial employees have started a campaign website ( http://www.medi-vial.com/), to inform and encourage Politicians and the Government to change the law to stop this sort of abuse reoccurring. The campaign has already gained the support of a small number of celebrities, think tanks and concerned individuals via Twitter.
The campaign Spokesman said:
"It's astonishing that that this loophole in UK law exists, and even more surprising that the Government is taking such little interest in fixing it. It should only take a small amendment to the Insolvency Act or the Employment Rights Act."
"Currently, the Government doesn't seem to think that it's worth making this change to the law, so we want to show them that protecting the rights of employees when companies become insolvent is a serious matter."
Anybody wanting to read the complete story of the Medi-Vial employees can visit http://www.medi-vial.com/ where they will also find the resources to help us tell the Government that the law needs to be changed.
Campaign to Stop Insolvency Abuse