Redundancy where employer enters administration - FAQs

by Charles Millett

I have been made redundant because my employer has entered administration – what can I do?

You will probably have been notified of redundancy by the administrator.  They should provide you with the necessary forms to claim arrears of pay, statutory redundancy pay, notice pay and holiday pay from the Government.

Are there limits on what I can receive from the Government?

Yes.  Although you should get your full statutory redundancy pay, you will only get notice pay capped at a weekly sum of £489 and only in line with statutory notice periods.  For example, if you earned £600 a week and had a contractual right to 3 months’ notice, but had continuous service for the company of 3 years, you would only get notice pay from the Government’s fund based on your 3 years’ service at £489 a week.  In this example, you would only be getting £1,467 as notice pay instead of the £7,200 that you would otherwise have been entitled to under your contract. 

You can claim arrears of pay and holiday pay but only up to a maximum of 8 weeks’ pay in total.

Are there any other claims I can make?

Potentially yes. If 20 or more people were employed at the site where you were based and all of you have been made redundant within a 90 day period, you will have a claim for a protective award if your employer did not consult for a minimum period with employee representatives.  Often in cases of companies going into administration, no consultation will have occurred and certainly not for the minimum 30 day period (45 days where there more than 100 or more employees are affected).  

How can I bring a claim for a protective award?

You can bring a claim to an employment tribunal, ideally as a group action with your work colleagues.  If you are a trade union member, your union is likely to assist with this, but if like many employees you are not, you can ask a solicitor if they will act for you on a no win no fee basis.

How likely is it that the solicitor will take on my case on a no win, no fee basis?

It depends upon the potential value of your case.  A solicitor cannot take more than 35% of your award to cover their fees, so if the value of your claim is below a certain level, it may not be cost effective for them to act under a no win, no fee agreement.  However, if you have colleagues who want to join you in claiming for a protective award, it is much more likely the solicitor will agree to act under a no win, no fee arrangement if those colleagues agree to instruct the same solicitor on the same basis.

What are the risks in pursuing a claim for a protective award?

If the solicitor agrees to act under a no win, no fee arrangement and now that employment tribunal fees have been outlawed, there is virtually no risk in pursuing the claim.  You and your colleagues could be awarded up to 8 weeks’ pay (capped at an upper limit of £489 per week) as a result of bringing the claim, so it seems the only reason many employees don’t bring this claim is because they don’t know they have the right to bring it!  

I had only worked there for 6 months.  Surely I can’t claim a protective award?

Yes you can.  There is no minimum length of service required to claim a protective award. 

Can Morecrofts help me bring a claim for a protective award?

Yes, we have considerable experience of acting for groups of employees in such circumstances and successfully recovering protective awards for them, initially by getting an award from the tribunal and then recovering this through the Government’s National Insurance Fund .  If you are one of 20 or more employees at your workplace who has been affected in this way, you should not hesitate to contact us.  

How soon should I get in touch with you?

You should contact us as soon as possible after you have been made redundant.  There is a strict time period of within 3 months for bringing a claim for a protective award and if you need to get in touch with colleagues to see if they will join you in a claim, this might take some time to organise.  

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If you have been affected by redundancy at your workplace caused by your employer’s insolvency and if you are one of 20 or more employees there who have been made redundant, you should call our employment team on 0151 236 8871 or email us at cgm@morecrofts.co.uk