When You Don’t Get Paid
One of the great paradoxes of every recession is that more businesses fail as the economy recovers than they do during the downturn. This recession promises to be no different, as the players of Portsmouth FC, who have failed to receive their wages for November, are finding out.
Portsmouth’s case may be more complicated than the usual reasons for post-recession company failure. Generally, companies struggle to stay afloat during the recession, extending their overdrafts and other borrowings to the limit. When the upturn arrives they start to get orders again but have no working capital left to fulfil the orders. The result is that they overextend themselves, and go bust.
The first thing that staff are likely to know about their companies impending failure is when their wages are paid late or not at all. If this happens to you, treat it as a warning sign. What will you do if the company you work for is going under? Should you start looking for another job immediately, or stay in the hope that the Directors will be able to turn things around?
The simple answer is that every case is different. More than anything else you need information. Do not be afraid to ask your senior management what is going on. If they refuse to tell you, consider that to be a negative message. If they try to reassure you, ask for tangible evidence that supports their assertions. Don’t be afraid to be direct with them, if they are trying to sell the business or bring in outside investment, they need you to stay, they probably can’t afford to have staff drifting away during a rescue attempt.
Most of all, be assertive in what you do. If you feel it is better to leave than to carry on working when wages are not being paid, then do so. It is tough in the job market right now, but that is no reason for donating your time to a failing company. If you think that by staying you may eventually receive a redundancy package, think it through carefully. Is a company that cannot pay wages likely to be able to give generous redundancy terms?
It is a tough time and you may need to take tough decisions. But don’t be afraid to take them.
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Tags: Company Failures, Compensation Package, Portsmouth FC, recession
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