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London school goes bust for second time
By EL Gazette | June 2016
Source: http://www.elgazette.com/

The East London School of English Ltd (ELSE) in Aldgate, London closed suddenly on 29 April, leaving seventeen staff without jobs. A last-minute attempt to organise a management buyout to save the school failed. All students have been found places in other schools through the English UK Student Emergency Support Scheme.

A director of the company confirmed to the Gazette that winding-up proceedings were issued against the company, which is wholly owned by L2 Language Consulting of Poland, when it failed to meets its obligations under a company voluntary agreement set up in 2012. Under this agreement the company, then called ELT Banbury after the first UK school acquired by L2 Language Consulting, was legally obliged to repay its creditors £118,0000 over five years, with some 90 per cent of the debt owed for unpaid taxes, including employees’ income tax and national insurance payments, according to documents held at Companies House.

The tax authorities may be owed more money following the recent closure, if deductions for staff income tax and national insurance have not been made. Teachers had been issued with freelance contracts, seen by the Gazette, stating their fees ‘were inclusive of VAT, national insurance, income tax’. However, a report on the details of this contract issued by the UK government’s Employment Status Indicator suggests ‘that the worker is an employee in respect of this engagement’, meaning that tax would be owed by the school, if the contracts were indeed treated in the way the wording suggests.

East London School of English staff were not given the one week’s notice of redundancy required by law and were not given pay in lieu of notice. It is unclear whether they will be eligible for payments from the government’s Redundancy Payment Service, which provides for employees of bankrupt companies, though repayments to this service were made under the 2012 company voluntary agreement, presumably in lieu of money paid to staff in 2012.

Asked to comment, the director told the Gazette that all operations and financial matters were ‘handled locally’ in the UK and that he hoped that they had been managed ‘in an appropriate manner, acting in aspects in accordance with UK law’. Under English law, officers of a company can be made personally liable for the unpaid taxes of employees if it is found that failure to pay was a result of fraud or neglect.

Some teachers have found work with other language schools – aided by English UK’s Huan Japes, who has ‘posted on behalf of ELSE’s teachers on our member forum and elicited quite a few job offers and opportunities for them’, English UK told the Gazette.

The ELSE director confirmed to the Gazette that references to the East London School of English and ELT Banbury had been removed from partner schools. L2 Language Consulting owns at least one language school in Poland, the Cambridge School of English Warsaw, according to its website. ELT Banbury no longer functions as a language school but as an online teaching operation operated by L2 Language Consulting from its website address.

The director told the Gazette that ‘the owner is also very disappointed in the closure’ and that ‘neither the owner nor the directors have ever received any dividends or remuneration’ from the business.

(End of article)