Bounced pay cheque

A

admiral

Guest
My pay cheque for September was delayed.
We were told to hold off lodging until late last week.
The boss updated us and told us to proceed to lodge cheques on Tuesday.
Some members of staff were told to lodge them several days earlier.

I got wind yesterday that a colleague's pay cheque bounced and it seems the employer is now aware of the situation.

We were given assurances that it was ok to lodge the cheques on Tuesday.
We are aware the company has a severe cash flow problem due to lack of sales.
The boss claims that he has an incoming amount of funds which he was waiting to clear in the company bank account.
He seems to be blaming the bank for being inflexible given that he had indicated to them that these funds were arriving on a particular day, etc.
We had some similar issues a good while back when the company got into financial difficulties.

It is now 14 days into the month (and there are several employees impacted).
What is the best course of action ?

A.
 
The writing on the cheques is useless, the writing on the wall is clear . . . start redundancy negotiations while the boss is still around.
 
If the company has cash problems due to lack of sales this would indicate the end is near. If the company was trading well but encountered a temporary cash problem this would be a different matter
 
admiral said:
He seems to be blaming the bank for being inflexible given that he had indicated to them that these funds were arriving on a particular day, etc.A.
Click to expand...

An even more common circumstance. The Bank's are busy ensuring all and sundry suffer because of their mistakes and greed.
 
mercman said:
An even more common circumstance. The Bank's are busy ensuring all and sundry suffer because of their mistakes and greed.
Click to expand...

So you are stating in this case the bank is refusing to pay out on cheques where the funds do not exist to back them simply so they can inflict some suffering on 'all and sundry'?
 
I agree .. it would be wrong to characterise this as a bank being stubborn issue.
The employer has since tried to explain why the wages cheques bounced.

It seems he projected the company cash flow for the next few weeks on the imminent arrival of a tax rebate (30k or more) from Revenue comm'rs.
It seems the company has a guaranteed rebate due from Revenue but it hasn't yet arrived in the account.

It seems he gave the go ahead for us to lodge the paycheques on the basis that he got notice from revenue that they were going to issue the refund as opposed to the bank confirming that the funds had arrived into the account.

He has gone off to UK now (hoping to get sales) and in the meantime is chasing up revenue (via company accountants) to make good on the promised rebate.
He said he will have a meeting to update on the cash position of the company at the end of the month when he returns from UK.
In the meantime the employees are out of pocket for September wages and we are rapidly approaching the end of October pay period by then.
 
Question on your OP was to seek advice on the best course of action. Sept wages are in arrears and Oct wages payment date in imminent. Employers cash-flow position appears to be problematic.
However he does appear to be in communication with all employees on this issue and has identified the Revenue rebate as a potential source of payment. Yes I agree with other posters that the postion does look bleak. However there is little to be gained by taking any pre-empative action at this time. He has promised a meeting at the end of this month and is currently in the UK. All employees are priority creditors in the event that the business is wound up. However you stand alongside the Revenue in this status and if there are Revenue arrears the pot to distribute may not be sufficient to meet all over wages and taxes. Positively if he is awaiting a Revenue rebate he is unlikely to be in trouble with them. You may have little option but to continue working until the end of the month but unless some element of payment is made at or immediately post the next meeting you will need to make the tough decision of whether you should jointly continue in this employment or take action to recover the overdue wages. If you have a nominated TU rep then he/she should be in constant contact with the employer to obtain confirmation on when funds will be available. If not then it may be worth nominating a spokesperson to act as a conduit for all employees.
 
Leo said:
So you are stating in this case the bank is refusing to pay out on cheques where the funds do not exist to back them simply so they can inflict some suffering on 'all and sundry'?
Click to expand...

No No, I am not stating as to how you percieve my statement. Mine was based on the statement made that the Bank in question, were aware, similar to previous occurrences, of funds soon to be forthcoming and happened previously, that they could have worked with the Directors rather than beat with the big stick syndrome.
 
admiral said:
He said he will have a meeting to update on the cash position of the company at the end of the month when he returns from UK.
.
Click to expand...

You should be looking for an update on the profitability of the company- not just the cash position.

This will give you a good indication as to whether there is any future in the business and allow you to make decisions on your future.
 

The company's cashflow is the company's business. To suggest the bank could or would honour cheques where no funds exist to cover them on the basis of a verbal assurance of incoming funds from the company director is frankly ludicrous. To suggest they should accomodate this with the knowledge the company faced cashflow issues in the past even moreso. A bank official who presided over such a transaction would likely find themselves in trouble due to wreckless practices.

You may as well walk into your local branch and ask them to cash a million Euro cheque because you're going to win the lottery next week.

If the directors want to arrange an overdraft or short term loan facility, then they should arrange that with the bank. Chances are they never approached the bank and are just using them as a feeble excuse.
 
You must log in or register to reply here.
Menu
Log in
Register