Confusion appears to be growing among employees of Manchester auto data specialist Wejo, as growing numbers of staff report that their wages have been recalled after initially landing in their accounts as normal at the end of the month.
The Nasdaq-listed Manchester automotive data intelligence firm filed a notice of intent to enter administration on Tuesday evening, UK time, with the US Securities and Exchange Commission. Wejo Limited is initially affected with a decision to be taken on the wider Wejo Group Limited and other subsidiaries “in due course.”
As salaries landed on Wednesday May 31 – Prolific North understands that Wejo employees are typically paid at the end of the month – a growing number of employees began to take to social media reporting that their salaries had been recalled after having landed in their accounts.
Initially, the recalls seemed to be limited to a handful of banks, but by Thursday morning the practice appeared to be widespread and common to virtually every high street bank. One thread on LinkedIn has grown to over 70 posts, largely by employees whose wages have been recalled, although a small number said their wages never arrived in the first place. Further conversations were also spreading on other social media platforms, with the salary recall a common theme.
Several staff described themselves as having been forced into unauthorised overdraft or missed payments due to the unexpected withdrawal of funds, while one out-of-pocket employee noted that they appeared to have been taxed prior to the withdrawal taking place: “Not only did they pay us, issue payslips, retract the payslips, retract the payment. I’ve checked my tax status and HMRC are showing they have paid us, and as a result taxed us,” they wrote.
Other staff reported contacting their banks when they heard of the recalls and being reassured that a recall could or would not take place, only for it to later happen, while some reported simply being advised to take the matter up with their employer.
Understandably, many staff questioned the legality of the recalls.
Nationwide, one of several banks mentioned in the many conversations online, told Prolific North it could not comment on specific cases, adding in a statement: “Under the rules of the BACS scheme, payments can be recalled by the initiating bank if done so before the funds are settled. In these cases the recall is done before the funds are settled with the receiving bank or building society, so they are unable to apply them to their customers’ accounts.”
Professor Dominic Regan, head of the Knowledge Hub at Salford’s Frenkel Topping, visiting Professor at City Law School, and a contributor to Tolley’s Employment Handbook and New Law Journal, told Prolific North: “The reality is that if the money is not there, what can you do? You can’t sue the company, because the company’s got no money. You can’t blame the bank, because the bank’s arrangement will be ‘we’re paying out on the condition the funds are there.’ So if the funds aren’t there, the bank will withdraw. And of course, the bank’s contract is with the company, not with the individual. I just want to be brutally honest.”
Regan did have some good news, however. In the immediate term, he advised that affected employees speak to landlords or mortgage lenders who will often be understanding in such circumstances. In the longer term, there are more concrete steps employees can take, although he added the caveat that most of the legal protections for employees of insolvent companies apply to salaried employees only, and not consultants or freelancers.
Employees can look to the government to cover some of the money they are owed, said Regan, beginning with arrears in pay: “They can get up to eight weeks arrears of pay, up to a maximum of £643 per week. So if they’re on £200,000 a year, they’ll still get a maximum week’s pay of £643 under the state scheme. If the company has gone into liquidation solvency, there will be always an insolvency practitioner, and they will send out all the forms and the information about this,” Regan advised – in Wejo’s case the administrator appointed is Manchester’s Leonard Curtis Recovery.
Next, employees can expect to receive any accrued annual leave and statutory notice they are entitled to through the same scheme – Regan emphasises that this is statutory notice, not contractual notice, so even if an employer has given a member of staff a 10-year notice period, the amount due will be subject to the government’s own pre-set formula, which ranges from one week for anyone employed for longer than a month up to a maximum of 12 weeks after 12 years of service or more.
Regan had two further crucial pieces of information for employees: Firstly, free calculators for all of the entitlements he has mentioned are available for free on both the .gov and Citizen’s Advice websites.
Secondly: “Nobody, nobody should be attracted by these claims management companies who may try and pile in and say ‘oh, we’ll sort it out for you and take 25 per cent’ – the insolvency practitioner will send all the forms. I mention this because it breaks my heart when I see people giving away hard-earned money to these baboons.”
For now, the future for Wejo’s around-200 staff remains uncertain. Tuesday’s statement issued to the SEC claimed that: “The delisting of the Public Securities would not affect the Company’s operations or business.”
In an email sent to all staff by Wejo CEO Richard Barlow on Tuesday evening and seen by Prolific North, however, employees were instructed to stop working “with immediate effect.” The email added that a small group would be contacted in order to “help maintain the business in the short term,” while “the Directors will most likely have no alternative but to make each of you redundant over the coming days.”
At the opening of the Nasdaq this afternoon, Wejo shares continued to trade and stood at $0.10 at the time of writing, slightly up on yesterday’s $0.085 close. Prolific North has attempted to contact Wejo for comment.
