Staff at insolvent train maintenance firm Railcare Limited will not receive wages for the month leading up to the company’s administration.
Joint administrator Kim Rayment confirmed on 7 August that staff would be paid advanced wages between 1 August and 10 August on Friday (9 August).
Rayment said: “Monies have started to be received for work going forward, and as a result the joint administrators are in a position to pay staff advance wages for the period between 1st and 10th August.
“These wages will be paid on Friday and we are hopeful of being able to confirm further wage advances next week. Staff wages are the primary concern of the joint administrators.
“At present, there are insufficient funds to be able to pay staff wages in arrears for the month leading up to administration. We understand that this will have caused hardship.
“This is why the joint administrators are committed to paying staff promptly for the work they are currently doing to the extent that circumstances allow.
“The joint administrators are doing everything possible to stabilise the business and are in discussions with a number of interested prospective buyers, who will be able to secure Railcare’s future. “
Rayment, Ian Gould and Bryan Jackson of BDO LLP were appointed joint administrators of the company on 31 July 2013.
Railcare, based in Glasgow’s Springburn and Wolverton in Milton Keynes, employs over 500 staff who now face redundancy.
The company was forced into administration through a short-term cash flow crisis and on 2 August over 150 job losses – representing around 40% of the company’s total permanent staff – were announced across the two sites.
Rail union RMT general secretary Bob Crow has called for the Government to step in and save the company with a rescue package.
He said: “In our meetings with government officials RMT has pressed the case for Railcare to be taken in public ownership and for Network Rail to have the chance to run the business.
“If nationalisation was good enough for the banks when they were in crisis then it should be good enough for the oldest railway works in the world.”