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Can notice and redundancy pay be claimed if your employer becomes insolvent?
Yes, in many cases UK employees can still claim notice pay and redundancy pay after an employer becomes insolvent. If the business cannot meet its debts, these payments may instead be claimed from the National Insurance Fund through the Insolvency Service.
This is often the route used where an employer has gone into liquidation, administration or bankruptcy. The key point is that insolvency does not automatically remove your rights, although the process for recovering payment is different.
What payments may be covered?
You may be able to claim statutory redundancy pay if you have worked for the employer for at least two years. You may also be able to claim statutory notice pay if you were not given the correct notice before your employment ended.
Other unpaid amounts can sometimes be claimed too, such as holiday pay and certain unpaid wages. However, there are limits on what can be recovered, and not every contractual payment will be covered in full.
How the insolvency claim process works
When an employer becomes insolvent, an insolvency practitioner is usually appointed. They will confirm the situation and provide information about making a claim.
Claims for redundancy and other employment debts are normally made online through the Insolvency Service. You will usually need details such as your employment dates, your final pay, and the reason your job ended.
The Insolvency Service checks the claim and pays eligible amounts directly to you. In some cases, if the employer has enough assets, the insolvency practitioner may also pay part of what you are owed from the company’s remaining funds.
What notice pay can you get?
If you are entitled to notice but did not receive it, you may claim statutory notice pay. The amount is based on your age, length of service and weekly pay, but it is subject to the statutory cap.
If your contract gives you more notice than the statutory minimum, the extra amount may be harder to recover. In insolvency cases, the fund often covers only statutory entitlements, not every contractual enhancement.
What should you do next?
Keep copies of your contract, payslips, P45, redundancy letter and any communication from the employer or insolvency practitioner. These documents can help support your claim and speed up the process.
You should also check whether you have been dismissed, made redundant or placed on garden leave, as this can affect notice pay. If you are unsure, you may wish to seek advice from Acas, a trade union, or an employment solicitor.
Act promptly, because delay can make the claim harder to complete. Even where a business has failed, employees may still be able to recover a significant part of what they are owed.
Frequently Asked Questions
Notice and redundancy pay entitlement after employer insolvency UK refers to the statutory rights employees may have when their employer cannot pay wages, notice pay, redundancy pay, holiday pay, or other debts because the business has become insolvent.
Employees who meet the legal conditions for redundancy or notice pay and whose employer has become insolvent may be eligible to claim through the Redundancy Payments Service, subject to limits and employment status rules.
If your employer cannot provide your contractual or statutory notice because of insolvency, you may be able to claim statutory notice pay for the notice period you were entitled to, usually up to a maximum of 12 weeks.
If you qualify for statutory redundancy pay, you may claim it through the government scheme when your insolvent employer cannot pay. The amount depends on your age, length of service, and weekly pay, subject to statutory limits.
You usually claim through the Redundancy Payments Service after your employer enters insolvency and you receive the necessary case details from the insolvency practitioner or official receiver.
You will typically need your employment details, termination date, pay information, National Insurance number, and any documents from the insolvency practitioner or official receiver confirming the insolvency case.
Notice pay is usually based on your normal pay for the notice period you should have received, while redundancy pay is based on age, length of service, and weekly pay, subject to statutory caps.
Yes, the insolvency payment scheme may also cover certain unpaid wages, along with holiday pay, notice pay, and redundancy pay, although each category has its own limits and rules.
Yes, you may be able to claim up to a limited amount of untaken holiday pay if your employer is insolvent and owes you accrued holiday entitlement.
Processing times vary depending on the insolvency case and the completeness of your claim, but many claims take several weeks or longer to be assessed and paid.
Yes, length of service can affect redundancy pay entitlement and the amount owed. In general, longer service can increase redundancy pay, provided you meet the eligibility requirements.
Yes, age is one of the factors used to calculate statutory redundancy pay. Different age bands can change the number of weeks' pay used in the calculation.
If the amount owed is above the statutory limits, you may only receive the capped amount from the government scheme. Any unpaid balance may become part of the insolvency process as a debt.
You may still be able to claim if the dismissal and insolvency meet the legal conditions, but entitlement depends on the reason for dismissal, your status, and whether the debt is covered by the scheme.
If you resigned voluntarily, you will usually not be entitled to redundancy pay, but you may still have rights to unpaid wages or holiday pay. Notice pay depends on the circumstances and whether proper notice was owed.
Company directors may sometimes qualify, but entitlement depends on their worker status, employment contract, and the nature of their role. Not all directors will be eligible.
Agency workers may have different rights depending on who their employer was and whether they were employed or self-employed. Eligibility must be checked against the specific facts of the arrangement.
Yes, part-time workers can often claim if they meet the same statutory eligibility rules as full-time workers. Their entitlement is usually based on their pay and length of service.
You should confirm the insolvency details, gather your employment records, check any correspondence from the insolvency practitioner or official receiver, and start the claim process as soon as possible.
You can get help from the Redundancy Payments Service, the insolvency practitioner or official receiver handling the case, your trade union if you have one, or an employment adviser.
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