Redundancy—insolvency and the state guarantee fund
Redundancy—insolvency and the state guarantee fund

The following Employment practice note provides comprehensive and up to date legal information covering:

  • Redundancy—insolvency and the state guarantee fund
  • Employer's refusal
  • Employer's insolvency
  • The amount—statutory redundancy payment
  • The amount—payment under a formal settlement agreement
  • The amount—payment under a collective agreement
  • Interest
  • Procedure for claiming
  • Time limit
  • Information
  • More...

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marks the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. At this point in time (referred to in UK law as ‘IP completion day’), key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see Practice Note: Brexit and IP completion day—implications for employment lawyers.

An employee may apply to the Department for Business, Energy and Industrial Strategy (BEIS) to pay the statutory redundancy payment out of the state guarantee fund (the National Insurance Fund) if the employee is unable to obtain the payment from their employer because:

  1. the employer refuses to pay (see Employer's refusal below), or

  2. the employer is insolvent (see Employer's insolvency below)

To obtain the payment, the employee needs to show that the employer is liable to pay the employee either:

  1. a statutory redundancy payment (see The amount—Statutory redundancy payment below)

  2. a payment under an Acas-conciliated settlement or a formal settlement agreement (see The amount—payment under a formal settlement agreement below)

  3. a payment under an approved collective agreement (see The amount—payment under a collective agreement below)

Employer's refusal

If the employer is solvent but refuses to pay, the employee will need to show that they

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