Employees And Redundancy Help On Insolvency

Overview Of Employees and Redundancy Help On Insolvency

The following information and links are provided to enable employees to understand their rights and the ability to claim in cases of an insolvent employer.

Forms

Redundancy Factsheet for the insolvent employer

Factsheet: what to do when you’ve been made redundant

Form RP1: claiming for redundancy of an insolvency employer

Form RP2: Claims For Loss Of Notice

Explaining your redundancy payments

Form RP3: Employment Status Assessment

Contacting The Redundancy Payments Service

You cannot currently call the Redundancy Payments Service but you can email them redundancypaymentsonline@insolvency.gov.uk.

What to do when you’ve been made redundant

What you can apply for

What you can apply for depends on your circumstances. You may be eligible for more than one type of payment. If so, it’s very unlikely that we’ll send all your payments at the same time.

The Insolvency Service can pay:

• redundancy pay: if you have worked for your employer for at least 2 years. You can use the statutory redundancy calculator to calculate your entitlement

You have 6 months from the day you are dismissed to apply for statutory redundancy pay.

• holiday pay: any unused leave you were entitled to take between the start of your holiday leave year and the date of insolvency and holiday you’ve taken but not been paid for
• money you’re owed by your employer, for example unpaid wages, overtime and commission
• statutory notice pay, if you have worked for your employer for at least one month

There are limits on what you can be paid for each type of claim. Check for the limits on the government your rights if employer insolvent page.

If you are owed more than the Insolvency Service can pay, you can register as a creditor in the insolvency. For more information on how to register as a creditor, you need to contact the insolvency practitioner handling the case.

How to apply

There are 2 separate applications you must complete. Both must be completed online.

You cannot claim without the CN number. If you do not have one, contact the insolvency practitioner handling your employer’s insolvency.

Claim redundancy pay and other money owed (RP1) is for:

• redundancy pay
• holiday pay
• other money you are owed, including wages, overtime, bonuses and commission

Claim loss of notice pay (RP2) is for:

• statutory notice pay

Claim for redundancy pay (and other money owed) (RP1)

Complete the online application.

The information you will need to complete the form is:

• your bank account details
• your National Insurance number
• your email address
• start date of your employment
• the date of your redundancy
• the date of your last working day
• gross rate of pay
• any breaks in employment
• the number of holiday days you’re entitled to and holiday days you’ve take
• details of wages and other money you’re owed by your employer
• details of any money you still owe your employer (for example season ticket loans)

The application will also ask if you want to claim compensation for loss of notice.

Ticking ‘Yes’ does not mean that you have applied for loss of notice compensation. You need to complete the RP2 application to apply for loss of notice.

You can only apply for loss of notice pay once your notice period ends. The Insolvency Service will let you know when this happens.

You must complete this form first even if you are only claiming for loss of notice.

Claim for loss of notice (statutory notice) pay (RP2)

Apply for loss of notice pay once your notice period has expired.

Claim for loss of notice pay

When you can make a claim for loss of notice pay

You will receive an email from the Insolvency Service once your statutory notice period has come to an end. The email will also confirm the start and end dates of your notice period. You cannot apply for loss of notice pay until you receive this email.

Once you have received this email, you will be able to apply online.

You must complete this application before we can pay you statutory notice pay.

Applying online

Completing an application takes between 10 and 20 minutes. When you start your application, you will need your:

• National Insurance number
• ten character claim reference – this will start with LN

The Insolvency Service will ask you about your circumstances during your notice period. You’ll need to have information with you about:

• any benefits you were entitled to during your notice period
• any income you earned during your notice period

You will need to keep copies of any paperwork you receive about any benefits you may or may not be eligible for. We may need these to prove your entitlement to a payment.

You do not include information on your claim form about any Universal Credit money you’ve received but will be paying back. This could be an advance, for example.

Processing your application

95% of applications are paid within 6 weeks.

What you can receive

If your application is successful, you will receive pay for each week of your notice period. There are caps on what the Insolvency Service will pay you for each type of claim. Find out more about how much we can pay.

From your payment the Insolvency Service will deduct the value of any:

• new benefits you were awarded during your notice period
• new income you earned during your notice period
• benefits you could have been awarded during your notice period if you’d applied for them (for example, Jobseeker’s Allowance or Universal Credit) even if you chose not to claim them

What you can get from the Redundancy Payments Service

What money you’re entitled to depends on:

• how long you were employed
• what was in your employment contract
• your age

Payments are capped.

Redundancy pay

You’re normally entitled to redundancy pay if you:

• have been made redundant
• were an employee
• were continuously employed by the insolvent business for 2 years or more

You’ll get:

• half a week’s pay for each full year you were employed and under 22 years old
• one week’s pay for each full year you were employed and between 22 and 40 years old
• one and half week’s pay for each full year you were employed and 41 or older

Redundancy payments are capped at £538 a week (£525 if you were made redundant before 6 April 2020).

You can get a payment for a maximum of 20 years that you were employed at the business.

Calculate your redundancy pay.

Wages and other money you’re owed

You can apply for unpaid wages and other money you’re owed by your employer, for example bonuses, overtime and commission.

You’re only entitled to money that’s in your employment contract.

You’ll get up to 8 weeks of money you’re owed. It counts as a week even if you’re only owed money for a few days.

Example
If you are owed £30 of overtime per week for the last 10 weeks, you’ll get £240 (£30 x 8 weeks).

Payments for wages and other money you’re owed are capped at £538 a week (£525 if you were made redundant before 6 April 2020).

You pay income tax and National Insurance when you get unpaid wages and other money you’re owed. You might be able to claim a tax refund if you’ve paid too much.

Holiday pay

You can get paid for:

• holiday days owed that you did not take (‘holiday pay accrued’)

holiday days you took but were not paid for (‘holiday pay taken’)
You’re only paid for holidays you took or accrued in the 12 months before your employer became insolvent.

You’ll only get payments for up to 6 weeks of holiday days. Holiday pay is capped at £538 per week (£525 per week if your employer went insolvent before 6 April 2020).

You pay income tax and National Insurance on your holiday payment. You might be able to claim a tax refund if you’ve paid too much.

Statutory notice pay

You’re entitled to a paid notice period when you’re made redundant, even if it is not in your contract.

You can claim for statutory notice pay if you:

• did not work a notice period
• worked some of your notice period
• worked an unpaid notice period

Your statutory notice pay is worked out as one week’s notice for every year you were employed, up to a maximum of twelve weeks.

Payments are capped at £538 per week (£525 if you were made redundant before 6 April 2020).

Pension contributions

Contact the insolvency practitioner or official receiver if you’re missing contributions to your pension.