Formaplex: Firm accused of ripping off workers with "free unpaid slave labour"

Formaplex's 500-strong workers were thrown into limbo and left “disgusted” after being served the bombshell news earlier in January by the firm’s owner Elaghmore they were set to lose their jobs and not be paid for January. The UK private equity fund group only bought Formaplex in 2021 after it had also entered administration back then.

Formaplex supplies lightweight component solutions to the automotive, motorsport, aerospace, medical and defence markets. The firm has four manufacturing sites in Hampshire - Voyager Park in Portsmouth, Access Point in Cosham, and sites in Horndean and Havant - and had been operating for more than 20 years. 

Alvarez & Marsal were appointed as joint administrators to save the business before employees were told the shock news and sent home. On Friday administrators revealed the firm had restarted trading again with positive talks being held to find a buyer - but revealed 171 people had lost their jobs.

One of those workers has now told The News that staff will not be getting paid in January and has questioned how this is possible when Formaplex has been allowed to trade again. It is also understood that workers will not receive redundancy pay through the company, with those losing their jobs told to claim via the government - where they will only get the statutory minimum pay-out.

An email on Friday titled "redundancy details" from the company to a long-serving redundant worker said: "I am very sorry for the news you received today. As promised, I have provided below some details which you will need in order to make your claim on the government website." It added: "You will also receive a copy of your P45 by email shortly."

The now ex-worker told The News: "The company definitely won’t be paying any workers their pay from December 16 to January 16. All the work during that time is basically free unpaid slave labour. Formaplex will definitely not be paying the redundancy, it has to be claimed through the government. We were bluntly told to claim through the government.

"How can a company not pay workers for a month of work when they are still trading? This has got to be illegal.  Again I’m sure all managers and high-ups still get paid.  They left employees in limbo for a week." 

Sarah Collins, joint administrator for Formaplex Technologies Limited, said on Friday: “Following the initial stocktake, we have partially restarted production this week. The continued level of ongoing production shows there is a strong demand for Formaplex products and we appreciate the support of the staff to enable trading to recommence so quickly. We have received a good level of interest from several prospective buyers for the business, with active discussions ongoing.

"As part of our efforts to save Formaplex, it has been necessary to rightsize the business to reflect its prospective revenues. Regrettably, this means that we have had to make 171 people redundant across Formaplex’s four sites, effective from 26 January 2024. We understand that it is a difficult time for these people and are providing them with support on claiming their entitlements. Formaplex’s remaining 274 employees will continue to work on production at the sites as we seek a buyer for the business.”

As reported, Penny Mordaunt, Portsmouth North MP, asked for a taskforce to be set up with the aim of helping employees thrown into limbo. She wrote on social media: "I held meetings with @kevinhollinrake (Minister for Business inc insolvancy), @Jochurchill_MP (Minister for Employment) and her colleague @mimsdavies (at DWP) re @Formaplex.

"I have asked that a taskforce be established to assist the workforce. These Ministers have since confirmed their departments and the Redundancy Protection Service are now engaged. My office have asked to speak to the company regarding the situation. In the coming days I will be monitoring the support on offer to employees and working on concerns I have raised re the role this firm plays in the supplychain. If you are in Portsmouth North and need support please get in touch via [email protected]."

The firm's announcement left workers angry. One “annoyed and upset” employee told The News: “I have just been told I am not getting paid for the month as my company has gone into administration…500 plus staff are losing their jobs.”

Another said: “Formaplex has gone into administration and told employees they will lose their jobs if they can't find a buyer.  Employees were told they would not be paid for any of their January work. 

“Disgusting company behaviour as I'm sure the CEO and high-ups knew about this days or even weeks in advance and will still receive their huge payouts and January pay. Another exploitation of the workers.” 

A spokesperson for Elaghmore, said: “Despite having made a significant investment in Formaplex since we acquired it in 2021, the extremely challenging economic and trading conditions since then have severely impacted the business. 

“The impact of high inflation, the disruption in global supply chains combined with the recent loss of two key customers meant that we reluctantly concluded with the management team that administration was the only option. We understand that there are several parties interested in acquiring the business from the administrator, and we hope Formaplex secures new ownership.”

When Elaghmore took over the business in 2021, 110 staff lost their jobs.