Liquidation


A. In the event of an employer being subject to liquidation (compulsory or voluntary), all jobs will be lost and employees will be redundant. But even if the employer is left with no money, there are still some options for employees.


If there is not enough money to pay employees, employees can claim the following from the government’s National Insurance Fund: statutory redundancy payment; a maximum of eight weeks’ wages (including in respect of a protective award); up to six weeks’ holiday pay; statutory notice pay (in some circumstances); pension contributions; and basic award for unfair dismissal. 


However, payment calculations are subject to a limit of £475 per week. 


In relation to statutory redundancy payment, any employee will need to fulfil the usual requirements for eligibility, including two years’ continuous employment. 


Legal advice should also be sought on potential tribunal claims and entitlements where an employer is in liquidation. The role of trade union representatives in assisting groups of employees will be crucial in these circumstances.