MORE than 100 staff have been told they should not expect any redundancy payments from the Government following the collapse of the Riley Brothers wholesale meats empire near Burnley.
Furious workers at the former Dunnockshaw operation have been informed by the Redundancy Payments Service (RPS) that an unusual anomaly, concerning how the family business was run, is likely to leave them without compensation from the Government scheme.
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Riley Brothers, which had been trading for around 110 years, folded on December 18, with the loss of around 130 posts, blaming trading difficulties caused by the strong pound.
It appears that those employed by the meat firm’s logistics division, Riley Brothers International Haulage, may still receive payouts.
Insolvency officials have confirmed the slaughterhouse section was run as an unincorporated partnership between Geoffrey Riley, Mandy Riley, Kevan Riley and Stephen Riley.
And because not all of the partners face becoming personally insolvent, any liability could not be enforced against the partnership as a whole, according to the RPS.
The administrator for Riley Brothers, Manchester-based KPMG, said it was unable to confirm which of the four partners are facing bankruptcy.
One senior member of staff, who asked not to be named, said: “I’ve had grown men ringing me up in tears. I just feel disgusted that we’ve been left in this situation – it was bad enough before Christmas but now we’ve been told we’ll be getting nothing.
“There were people who were owed their last wages, holiday pay and their notice who have been left high and dry.”
Edward Slattery, 47, who worked as a slaughterman with his brother Douglas, travelled to East Lancashire from his Birmingham home each week to Riley Brothers, and has been devastated by the closure.
He said: “I’m preparing to lose my house over all this. I was owed 90 days notice, three days holiday pay and a week’s wages.
“Some of the people there had worked for Riley Brothers for 10 or 15 years. I feel sorry for the people who run it, because it was a family business, but you don’t treat employees like this.”
A spokesman for RPS said it appeared that the majority of workers involved in the case seemed to be employed by B Riley, run by the four named members of Riley family.
He said: “If this is the case, and if the second named company (B Riley) was not a limited liability partnership, but a ‘regular’ unincorporated partnership, this means that the partnership has no liability for breach of contract. In such cases, it is the individual partners that are responsible.
“For that reason, we cannot make payments to the partners’ former employees unless and until all partners enter into individual insolvency proceedings.
“If the Redundancy Payments Service was to make payments based on only the unincorporated partnership’s insolvency, there would be no mechanism with which to enforce the debt against the solvent partners and recover funds for the National Insurance Fund, from where those who do qualify for redundancy are paid.”
It is understood workers could still take legal action against the solvent partners.
Last night administrators also confirmed that a number of business assets, including trailers and vehicles, were still missing from the Dunnockshaw site.
Several items were traced to the Bacup area but some property still remains outstanding.
Police have confirmed there is no criminal inquiry in relation to the matter.
A KPMG spokesman said: “It has come to light that a significant amount of the partnership’s assets, including plant and machinery, trailers and vehicles, were removed from the site in Dunnockshaw before the joint administrators’ appointment.
“Since then, a proportion of the plant and machinery has been located, but the remainder has not yet been found. The joint administrators are currently marketing the business for sale and finding these assets will assist in this process.”
Those with knowledge of the missing vehicles or plant are urged to call Emma Hill on 0161 246 4000.