One recovering cancer patient has been forced to move his family back in with his father as he continues to wait for redundancy pay he is owed after being let go when the firm behind a Gateshead food factory shut down operations.
The former Orchard House Foods (OHF) employee - who asked to remain anonymous as he continues to look for work - owes his elderly father hundreds of pounds and was unable to pay for Christmas presents for his children. This comes amid news that OHF have filed to appoint administrators.
This means that workers made redundant by OHF - who have already been waiting months for redundancy pay - are now reliant on the Insolvency Service and still no wiser about when they will receive the cash. Members of staff have told ChronicleLive how they've had nightmarish festive periods and spent the New Year so far relying on friends and family to borrow money.
The staff were due redundancy pay in early December - but this did not materialise as the firm explained it needed more time to raise the funds. This led to families "desolate" and scrambling to afford Christmas presents.
The man in question added: "It's absolutely ridiculous, I have had to move in with my father. That's because we can't afford the gas and electric in our house. That in turn meant I had to give up [an alternative] job because I couldn't afford to get there.
"The kids didn't get anything for Christmas because I didn't have anything. I've not been paid since December 9. I already owe my father six or seven hundred pounds. I'm in remission with cancer and can't even afford to get to appointments. Its outrageous."
When told they'd not receive redundancy cash on time, members of staff said they were not told anything further about when the money would be paid - other than "in the New Year" - before receiving an official message from the firm this week which explained it was calling in the administrators. Those owed cash have been told: "We wished to have been able to communicate and provide further detail earlier than this but unfortunately this was outside our control."
In August, OHF - which supplies the likes of Marks & Spencer, Morrisons and Pret A Manger - announced plans to close its Gateshead base which would put 430 jobs at risk. Though some staff had the opportunity to relocate to the midlands, hundreds have now been made redundant.
OHF had said it would pay final redundancy payments two weeks after someone's final pay packet - for many December 9. But this did not materialise - and former staff continue to wait. The firm cited "increasingly difficult trading conditions" and "significantly increased pressure on our cash position" as reasoning behind making the "very difficult decision" to shut down production in Gateshead and now to file a legal notice of intent to bring in administrators.
Ex-employees have been told: "You will now be asked to enter a process to claim your Statutory Redundancy Pay, Pay in Lieu of Notice (PILON) and outstanding holiday via The Insolvency Service, which is a Government department issues payments through the National Insurance Fund."
Another recently redundant employee told ChronicleLive: "What it means is we're still waiting for money. It's been a terrible time. It should be a really positive start to the year, a new and prosperous year. But we have no money. It's been about borrowing from family just to get through."
Blaydon MP Liz Twist, in whose constituency the former Orchard House Foods factory sits, said in December that delays in payments were "outrageous". She's now added: "I am dismayed at the news that Orchard House Food is filing for administration and my thoughts are with every member of staff affected by this outcome.
"At a time when cost of living is soaring and following a month of uncertainty, former staff will now need to wait even longer for their redundancy payments, it is devastating news. I will work to ensure that between the business and the Insolvency Service, former staff receive their entitlement as quickly as possible."
A spokesperson for Orchard House Foods said: "We have announced the start of a legal process to appoint an administrator. We have had to take this action given the extremely challenging economic and trading conditions that have badly hit Orchard House Foods.
"The economic conditions have meant increased input prices and overheads, and this has significantly increased pressure on our cash position. As a result, the Directors have taken the difficult decision to file with the Courts a notice of intention to appoint an administrator."
They added that for the firms former employees at Gateshead, once an administrator is appointed, they will be able to claim any outstanding monies owed, including the delayed redundancy payments". The firm added it expected this to happen as soon as an administrator was appointed - and said it would be providing support for employees with these claims.
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