My company has gone into administration or insolvency, what rights do I have?

Last updated: 30 Jul 2020

This is likely to depend on whether or not the administrators believe they are able to sell the business as a going concern and retain jobs.

The Coronavirus Job Retention Scheme (CJRS) provides that administrators can claim for wages through the Scheme, but only where there is a reasonable likelihood of rehiring the workers.

If you are still employed at the time the company goes into administration, the administrator (insolvency practitioner) may take on your employment rights for a period and then seek to close the business.

Generally speaking, if an administrator employs you for more than two weeks, then your employment rights have been adopted and may then be transferred when the business is sold (this would usually be a TUPE transfer).

If your employer becomes insolvent you can make the following claims through the government’s National Insurance Fund:

  • Statutory redundancy pay (see our information on redundancy).
  • Arrears of pay – limited to eight weeks at the statutory limit of £538 per week.
  • Holiday pay – limited to six weeks holiday pay due or a maximum of £900 in the last 12 months, at the statutory limit of £538 per week.
  • Statutory notice pay – calculated on the basis of one week per year up to a maximum of 12 and capped at £538 per week. 

Further information is available on the Government site.

This page is designed to give general information about members’ rights on returning to work. It does not cover all circumstances and should not be treated as a definitive answer. Members should contact Prospect either through the Member Contact Centre on 0300 600 1878 or contact their union rep or full-time officer for specific advice.