What rights do I have if my employer becomes insolvent?

Last updated: 30 Jun 2020

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.

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Members can get more detail by logging in and downloading our guide to redundancy.