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Your rights if your employer is insolvent

  1. Overview
  2. Claiming money owed to you
  3. Where to get help

1. Overview

If your employer is ‘insolvent’ this means it can’t pay its debts. You have rights if this happens and can make a claim for money you’re owed.

Types of insolvency

If you work for a company that’s insolvent, this means one of the following:

  • administration – where your employer asks an ‘administrator’ to come in to try to keep the company going
  • liquidation – when a company is closed and its assets are sold to pay the people it owes money to (creditors)
  • receivership – like liquidation but it’s usually arranged by a single creditor that’s lent money securely (eg a bank), and the assets are sold to pay just that creditor
  • voluntary arrangement with creditors

If your employer’s an individual, insolvency is called either:

  • bankruptcy (‘sequestration’ in Scotland)
  • voluntary arrangement with creditors (‘deed of trust’ in Scotland)

The person who deals with the insolvency is called the ‘insolvency practitioner’.

Your rights

If you’re owed money, you can claim for it through the insolvency practitioner.

If you’re asked to keep working

The business might keep running if there’s a chance it can be rescued or sold. If this happens, you might be asked to continue working.

This doesn’t affect your rights to redundancy pay if the business closes down later.

If the business is sold to someone else, your employment rights are protected, including any pay that’s owed to you.

2. Claiming money owed to you

You can make a claim for money you’re owed if your employer has become insolvent.

What you can claim

The money will be paid to you by the government. It’s not guaranteed that you’ll get everything your employer owes you but you can claim for:

  • statutory notice pay
  • redundancy
  • up to 8 weeks’ wages, including a payment for a protective award if your employer has failed to consult collectively with staff
  • up to 6 weeks’ holiday pay
  • unpaid pension contributions – get in touch with the insolvency practitioner to claim this for you
  • a basic award for unfair dismissal

You can get up to £479 a week for each claim. For example, if you’ve claimed for redundancy and loss of notice you can get payments for both.

Statutory notice pay

You can claim for statutory notice pay if:

  • you’ve worked your statutory notice period but not been paid by your employer – the Insolvency Service will write to you and tell you when to claim
  • you were dismissed without notice
  • you don’t work your full notice

If you get any other income during your notice period, the government will deduct this from your notice pay. This can include:

  • wages from another job
  • benefits you’re eligible for (like Jobseeker’s Allowance) even if you don’t claim them

You can’t claim for any notice that is over your statutory notice period.

Your statutory notice period (the minimum legal notice period your employer has to give you) is:

  • a week’s notice if you’ve been employed for between a month and 2 years
  • 2 weeks’ notice plus an extra week for each year you’ve worked if you’ve been employed for 2 years or more (this goes up to a maximum of 12 weeks)


You can claim statutory redundancy pay if you’re made redundant and if:

  • you’ve been continuously employed for 2 or more years
  • you apply in writing to your employer or an employment tribunal within 6 months of your job ending

You can calculate your statutory redundancy pay.

How to make a claim

You can claim online for:

  • redundancy pay, wages you’re owed, holiday pay
  • statutory notice pay – you won’t be paid until the end of your statutory notice period

You can get help making your claim online by using the help for claimants form or by contacting the Insolvency Service.

If you’re sick or becoming a parent

HM Revenue and Customs (HMRC) will pay you:

  • Statutory Sick Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Adoption Pay

If your employer’s insolvent and you’re having trouble getting these payments, call the Statutory Payment Disputes Team.

Statutory Payment Disputes Team
Telephone: 03000 560 630


3. Where to get help

For information about redundancy payments, call the redundancy payments enquiry line.

Redundancy payments enquiry line
Telephone: 0330 331 0020
Monday to Friday 9am to 5pm

For information about insolvency, call the Insolvency Service.

Insolvency Enquiry Line
Telephone: 0300 678 0015

You can contact Acas (Advisory, Conciliation and Arbitration Service) for help and advice on dealing with redundancy.

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