Employees of MF Global are only entitled to 800 each

3 November 2011

2 minute read

Employees of MF Global are only entitled to 800 each

There's been some concern in comments left on articles on this site that employees at MF Global won't be paid for October.

We understand that they will. According to MF Global insiders, KPMG held a conference call yesterday and assured everyone that their salaries are to be paid for the past month. There was, however, no mention of bonuses.

This is unsurprising. Under UK law, insolvency lawyers point out that employees are entitled only to 800 in a preferential payment ahead of all other creditors. Beyond that, they must join the queue and hope that money is left to compensate them (for guaranteed bonuses, commission related pay and remaining salaries) once MF Global's assets have been disposed of.

That hope may not be realised. According to Financial News KPMG is winding down MF Global's trades in a way that may leave them vulnerable to un-hedged risks, resulting in possible additional losses.

MF Global's latest UK accounts, filed March 31st, show it had $19bn in current assets, of which $426m was cash in the bank and a massive $10bn was 'securities purchased under agreements to resell and cash collateral on stocks borrowed." $18.5bn of that was owed to creditors within one year, leaving $565m in net current assets.

The accounts also show that the average employee at MF Global in the UK earned cash compensation of $240k last year. Share based compensation was minimal, at an average of just $863 per head. The company is thought to have operated hard-commission based payment schemes for some of its traders.

If the company is unable to make redundancy or notice payments, MF Global employees can make a claim via the UK's National Insurance Fund. However, there are restrictions on this. Weekly pay is capped at 400 and can only be claimed for one week per year of service, for a maximum of 12 weeks.

AUTHORSarah Butcher

Global Editor

Hu
Huge
3 November 2011
My advice to any of these ex-employees is to move to a country where people live on one dollar per day. That way they can make their redundancy pay last for about 3 years. See - life ain't all that bad after all..!!
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MR
MR Employee
3 November 2011
UK employees were paid their October salary in full. The November salaries should be paid for those still here as the business winds itself down. Reduncancies are already in full swing and contractors have already been cut... the amount paid to each will vary but we are guessing we will be paid statutory.
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