My employer has gone 'bust': how can I claim my pay owed to me?
Where an employer becomes insolvent owing debts to employees there is a special scheme to compensate these workers. This is known as the 'Insolvency Provisions' of the Employment Rights Act 1996. Under Section 184 of the Act the Department of Employment Redundancy Payments Section will pay to such workers the following debts:
Any arrears of pay up to eight weeks.
Any statutory notice pay.
Up to six weeks' holiday pay.
Any basic award of compensation for unfair dismissal from an employment tribunal.
Reimbursement of fee or premium paid by an apprentice or articled clerk.
Repayment of contributions to occupational pension scheme collected from employee's pay but not paid into pension scheme by employer - Section 124 Pension Schemes Act 1993.
Redundancy payments - Section 166 ERA 1996.
Contact must be made with the local Department of Employment Redundancy Payments Section for the appropriate forms. If a claim is refused by the Department of Employment, an appeal may be presented to an employment tribunal, normally within three months of the refusal.
Pension ? Insolvent company ? www.pensionprotectionfund.org.uk
For the majority of people below their scheme’s normal pension age the Pension Protection Fund will pay 90% level of compensation.
In broad terms and in normal circumstances, this means 90% of the pension an individual had accrued immediately before the assessment date (subject to a review of the rules of the scheme by the Pension Protection Fund) plus revaluation in line with the increase in the Retail Prices Index between the assessment date and the commencement of compensation payments (subject to a maximum increase for the whole period calculated by assuming RPI rose by 5% each year). This compensation is subject to an overall cap, which, as at April 2008, equates to £27,770.72 at age 65 (the cap will be adjusted according to the age at which compensation comes into payment. Please refer to the current compensation cap factors).
Once compensation is in payment, the part that derives from pensionable service on or after 6 April 1997 will be increased each year in line with the Retail Prices Index capped at 2.5%. Again, this could result in a lower rate of increase than the scheme would have provided.
Can I be made redundant if my employer's business is transferred to another employer ?
If made redundant because of a transfer of your employer's business to another employer then this may be unfair dismissal under the 1981 TUPE Regulations. Failure to consult the union in these circumstances could mean a payment to the employee of 13 weeks' pay. This is on top of any redundancy payment.
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