Hello, my name is***** am a qualified lawyer and I will be assisting you with your question today.
Have you received written confirmation of your redundancy package? Please can you also tell me how long you had worked there for? Thank you
OK thank you, ***** ***** it with me. I am in court today so will prepare my advice during the day and get back to you at the earliest opportunity. There is no need to wait here as you will receive an email when I have responded. Thank you.
Sorry can I just check if this was just a statutory redundancy amount or an enhanced one?
If your employer goes insolvent before the amount is paid then that would become a debt of the company and you will be a creditor. So you will join the queue of creditors in a certain order to try and get anything that is left over in terms of money and assets that may be distributed to its creditors. Usually it is rare for everyone to get what they are owed and they may get a few pence to every pound although it depends on what they actually have left.
If the company is unable to pay its debts and you end up with nothing, then you will have protection under the National Insurance Fund. Sadly they would not cover enhanced redundancy payments and only the statutory amount will be covered. So the risk is that you lose out on the enhanced portion of this payment.
This is your basic legal position. I have more detailed advice for you in terms of the protection you get under the NIF, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you
you are about third on the list after costs of the insolvency and secured creditors like banks. However, even on that list you have limits on what you can claim so the full payment may still not be covered. This is more of a corporate law matter though soc annot give out too many details as not my area of law.
That may indeed be the least risky option. If you do end up finding they go insolvent whilst still owing you money, the first step would be to contact the company’s insolvency practitioners (administrator, liquidator, etc.) to check if it is likely for any money or assets to become available for distribution amongst the company's creditors, including their employees.
If it appears unlikely that the company will be able to cover these payments, employees will also have additional rights to claim through the National Insurance Fund (NIF). The following debts, if owed to employees by an insolvent employer, can be recovered from the NIF:
· Up to 8 weeks' arrears of pay (up to the current maximum statutory limit on a week's pay) less basic rate tax and NI contributions.
· Up to 6 weeks' holiday pay (up to the current maximum statutory limit on a week's pay) which accrued in the 12 month period ending on the date of the insolvency, less basic rate tax and NI contributions.
· Statutory notice pay (up to the current maximum statutory limit on a week's pay) less basic rate tax.
· Statutory redundancy payment less any amount already paid by the employer
Any claims in excess of the above limits should be claimed from the insolvent employer in the usual way, such as through the insolvency practitioner or through court.
To be able to claim from the NIF, the following conditions must be met:
· Only employees can claim, therefore the self-employed, agency workers, etc are not covered
· The employer must have been made officially insolvent
· The employee’s employment must have been terminated
Assuming the above criteria have been met, the procedure for claiming requires the application to be made to the Redundancy Payment Office responsible for the employer’s area, by using form RP1. To get a copy of the form and for further details, you can contact the Redundancy Payments Helpline on 0845(###) ###-####
You are most welcome, all the best