Tag: Insolvency

Insolvency and Redundancy Payments

Insolvent jpegPreviously, if your employer became insolvent, and you were therefore made redundant, you used to have to go to an employment tribunal to claim all redundancy payments, but now you can apply direct to the government’s  Insolvency Service for the money that you are owed.

How to claim for redundancy and other money you’re owed by an employer

To apply, you must complete the online application. The Insolvency Service will then assess your claim and pay you the money you’re entitled to.

Separate payments are made for different parts of your claim, such as redundancy pay, holiday pay and arrears of pay. You will then be sent a letter each time that the Insolvency Service makes a payment. This means that you may get several different letters from the Insolvency Service.

Further Government Guidance

If you were made redundant on or after 6 April 2021, your weekly pay is capped at £544. If you were made redundant before 6 April 2021, these amounts will be lower. This means if your gross weekly pay was more than this, we have capped each one of your payments.

If you are owed more than the maximum we can pay, you can register as a creditor in the insolvency for any outstanding money you’re owed.

Further details can be found here

Your Rights If Your Employer Is Insolvent

If your employer is ‘insolvent’ this means it can’t pay its debts. You have rights if this happens and can make a claim for money you’re owed.

What you can claim

The money will be paid to you by the government. It’s not guaranteed that you’ll get everything your employer owes you but you can claim for:

  • statutory notice pay
  • redundancy
  • up to 8 weeks’ wages, including a payment for a protective award if your employer has failed to consult collectively with staff
  • up to 6 weeks’ holiday pay
  • unpaid pension contributions – get in touch with the insolvency practitioner to claim this for you
  • a basic award for unfair dismissal

You can get up to £479 a week for each claim. For example, if you’ve claimed for redundancy and loss of notice you can get payments for both.

You can find more detailed information here