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With the furlough scheme being wound down and the government’s criminal negligence in regards to planning and preparing for the economic fallout from the crisis, it’s clear that a wave of business failures are coming.

If you’re facing redundancy, the IWW has always got your back. If your employer is remaining open, you should be consulted on your redundancy and you should contact your local IWW branch for support and advice.

However, if your employer has gone into administration, the situation is a bit trickier. If your employee has closed up shop without paying your redundancy entitlement, your final payment, or any other wages that you’re owed, you have recourse. 


How to make a claim.

A redundant employee applies to the Redundancy Payments Service “if his employer is liable to pay him [sic] a statutory redundancy payment and the employer is insolvent; or refuses to pay and the employee has taken all reasonable steps, other than legal proceedings, to recover the payment”.

Depending on your employer’s company status, you may have to request a redundancy payment form from your employer which you then pass on to the Redundancy Payment Service.

Other money owed by your employer will be paid by the government.

HMCR covers:

  • SSP (statutory sick pay)
  • statutory maternity pay
  • statutory paternity pay
  • statutory adoption pay

Your pension contributions are protected and backdated for 12 months prior to the company’s insolvency by thePension Protection Fund. The company’s “appointed insolvency practitioner’’ is obliged to notify the PPF so the employee shouldn’t need to act.


Time limit to make a claim.

You have 6 months from the day you are dismissed to apply for statutory redundancy pay. Employers are only entitled to statutory redundancy pay if they have worked at that employer for 2 years. All employees, including those on zero-hours, part-time, and fixed-term contracts are entitled to redundancy pay after 2 years of service.

The standard calculation is 1 week of redundancy pay for each year of service, although this varies by age and there are maximum amounts.


What you can claim.

Any employees can claim for:

  • Unpaid wages:  Arrears of pay up to £538 a week for a maximum of eight weeks, including guarantee payments for workless days; payments for time off for union duties; remuneration for suspension on medical or maternity grounds; and redundancy protective awards.
  • A payment for failure to give statutory notice (usually 1 week’s wage, up to a weekly limit of £538.
  • Holiday pay for unused holidays and for holidays actually taken but not paid, up to a weekly limit of £538 for a maximum of six weeks. Holiday pay may include holiday carried over from the previous year if the contract of employment allows this. 
  • Unfair dismissal award made by an employment tribunal, if the employer hasn’t paid this.


What happens to employment contracts if company enters administration or is sold.

In administration:

If a company goes into administration, they have 14 days to make staff redundant or negotiate new contracts, after that period the new staff are protected with their existing contracts as ‘super priority’.


If company is sold on by the administrator:

If a business is later sold on (after being in administration for over 14 days), the employees that are still employed have ‘super priority’ and are protected under TUPE [Transfer of Undertakings (Protection of Employment Regulations 2006)].


In a liquidated company:

In ‘compulsory liquidation’ all employment contracts are terminated on the date of liquidation.


Large-scale redundancies (over 20 employees):

A collective consultation must be carried out within 90 days to ‘inform and consult’ (section 188 of TULRCA) failure by the employer to do so means employees may be entitled to a ‘protective award’ of up to 90 days pay. But employers may be able to claim ‘special circumstances’ for why they did not consult.


Wrongful dismissal:

In a ‘compulsory liquidation’ all legal proceedings against a company are halted, this means an employee cannot follow legal proceedings for wrongful dismissal (unless this moratorium to halt legal proceedings against the company is lifted).


Factsheets from Gov.uk

Information from IWW about redundancy.

If you are facing redundancy contact your local branch for support. Join IWW today.