YOUR
RIGHTS IF YOUR EMPLOYER IS INSOLVENT PL718 (Rev 7)
Contents
Introduction
This
document gives general information about the redundancy payments
scheme under the Employment Rights Act 1996 (referred to as ‘the
Act’ in this document). It is not a complete or authoritative
statement of the law; only the courts can provide that. If in
doubt, you should
seek
your own independent legal advice.
The
Redundancy Payments Offices
can
give you more information.
HELPLINE
There
is a helpline to answer your questions. The number to ring is
0845
145 0004
What
is insolvency?
If
your employer was a company, it is only insolvent if the company
has gone into liquidation, or an administration order has been
made against it, or a resolution for its voluntary winding-up has
been passed, or it has made a voluntary arrangement approved by
the court under the Insolvency Act 1986; or in certain
circumstances if a receiver or manager has been appointed or
possession of the company’s property has been taken under a
debenture.
If
your employer was an individual or a partnership in England or
Wales, there is only an insolvency if the individual or all the
partners are bankrupt or have made a composition or arrangement
with their creditors; if your employer was an individual (or a
partnership) in Scotland,
there is only an insolvency if sequestration of the estate of the
individual, (or the estate of the partnership) has been awarded,
or the individual (or each partner) has executed a trust deed for
his creditors or has entered into a composition contract.
There
are also special provisions for where an employer dies.
The
1996 Act defines the only kinds of insolvency which count. If your
employer simply stops trading, this is not itself insolvency.
3
Who
can qualify for our help?
You
will receive a payment only if you are or were an employee of the
insolvent employer. Self-employed people or members of a
partnership do not qualify. Directors may be employees if they
work under a contract of employment. This will not be the case if
they have a controlling interest
in
the company or only deal with company policy and go to board
meetings in return for fees.
People
who cannot claim
You do not need to have worked for your employer for a certain length of
time (but see Redundancy
payments) and there are no age limits. But you cannot claim until you have been
dismissed, or at all if:
-
you are a fisherman paid only by a share in the proceeds of your
catch;
-
under your contract of employment you normally work outside the
European Union, Norway and Iceland; or
-
you are a merchant seaman.
What you can claim
|
