If the employer becomes insolvent, the Government’s National Insurance Fund will pay some debts owed to the employee on redundancy.
These include:
- the statutory redundancy payment
- up to eight weeks’ arrears of pay (including any protective award)
- pay in lieu of statutory notice, and
- holiday pay.
A week’s pay in each case is limited to £538 (or £560 in Northern Ireland). These figures are current at 6 April 2020 and reviewed annually.
Unfortunately enhanced redundancy pay or further arrears of pay are not covered by the National Insurance Fund, so the employee becomes a creditor of the insolvent company and you may not be able to recover the additional sums.
These situations can be complicated so always seek advice from the union.
Get help
If you have further questions about this contact us for more help.
Read more
Members can get more detail by logging in and downloading our guide to redundancy.