Advice and Guidance for Employees

At a time when company’s fail and/or business cease trading, employees may find themselves being made redundant leaving them with claims against their employer.  The purpose of this guide is to provide some information on those claims.

In any formal insolvency process, employees can make a claim to the Redundancy Payments Office (RPO) for unpaid wages, unused holiday pay, notice not received and redundancy.

The Insolvency Practitioner appointed over their employer would be able to provide the relevant forms to those employees.

Claims made to the RPO can be summarised as follows:-

Arrears of wages/salary

• Restricted to 8 weeks accrued ahead of formal insolvency
• Statutory maximum applies of £400 per week

Holiday Pay

• Restricted to 6 weeks accrued in the 12 months ahead of formal insolvency
• Statutory maximum applies of £400 per week

Pay in Lieu of Notice

• A claim for the notice period that you should have received either in accordance with your contract, or statutory if no contract in place
• Statutory maximum applies of £400 per week
• An employee has a duty to mitigate their claim by seeking further employment and/or applying for any entitlements/benefits.

The statutory minimum period of notice is:

  • One week for continuous employment for more that one but less than two calender months
  • One week for each year of continuous employment for more than two years but to a maximim of twelve.

Redundancy

• A claim for redundancy would be in accordance with your contract or statutory if no contract is in place.
• Statutory maximum applies of £400 per week

To be entitled to claim redundancy, an employee must have been employed for a continuous two year period since the age of 18.

The calculation of entitlement is then based on age and length of service as follows:-

  • Aged 18 to 21 - half a weeks pay for each year of service
  • Aged 22 to 40 - One weeks pay for each year of service
  • Aged 41 to 65 - one and a half weeks pay for each year of service

A maximum of 20 years service is counted for redundancy purposes.

 

Occupational Pension Scheme

• Employer contributions in the past 12 months

 

Claims are submitted to the Redundancy Payments Office following formal appointment of an Insolvency Practitioner as Liquidator, Supevisor or Administrator.  Employees are able to make further enquiries to the relevant RPO offices as required. 


There is further information available on the following links: 

www.redundancyhelp.co.uk,

www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/Redundancy