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Redundancy of only employee, director taking loan

Director is raking dividends and directors loans

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I'm the only employee (and 20% shareholder) and have been sent a possible redundancy letter stating due to the Covid situation.  The director is still taking dividends and directors loans. It it legal to make me redundant on this basis.

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By Anonymous.
05th Aug 2020 01:10

Yes probably but you need to speak to a solicitor (and read your employment contract and shareholder agreement).

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By SXGuy
05th Aug 2020 06:51

A possible letter? How is it possible? It either is or isn't?

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Replying to SXGuy:
RLI
By lionofludesch
05th Aug 2020 08:06

Grammatically, possible could relate to redundancy or letter.

Imho, the OP is grand.

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Replying to SXGuy:
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By Sarah me
05th Aug 2020 09:00

Apologies, a letter of possible redundancy. I’ve now been ask to discuss it further at a meeting next week.
My question is really: is it legal to make someone redundant due to Covid situation if the director is still taking dividends and directors loans?

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Replying to Sarah me:
By mrme89
05th Aug 2020 11:58

Yes, of course it is.

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By paul.benny
05th Aug 2020 08:07

Unless you have some separate agreement, employment rights and those of shareholders are entirely separate.

Are your shares a different class to those of the director? If not, you should also be receiving dividends.

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By mrme89
05th Aug 2020 08:07

Your shareholding and company profits has little to do with whether or not your position is now redundant.

If you are a shareholder, you’ll also be ‘raking in’ 20% of those dividends.

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Replying to mrme89:
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By Southwestbeancounter
05th Aug 2020 14:48

mrme89 wrote:

If you are a shareholder, you’ll also be ‘raking in’ 20% of those dividends.


Not necessarily............... all depends on whether there is just one class of share or not
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Replying to Southwestbeancounter:
By mrme89
05th Aug 2020 17:27

Well, given John’s latest comment we are supposed to give simplistic answers based on the limited info provided and not press for further info.

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Replying to mrme89:
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By Southwestbeancounter
05th Aug 2020 19:10

Oh yes, I forgot that! Oops! ;-)

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