Phil MeekinView Profile
While a common occurrence when a company becomes insolvent, redundancy can strike at any time, even when a business is operating normally and efficiently. If the company undergoes a restructuring, downsizing, or they change how employees are contracted, you could unfortunately be on the receiving end and find yourself being made redundant.
A frustrating experience
If you work for a company that becomes insolvent, it can be an extremely frustrating experience, and employees may ask; when am I getting paid? Will I get all that I’m owed? As the company goes through the liquidation, employees can often be left in the dark, when it comes to calculating their how their claims are processed.
In many redundancy scenarios, employees can be left with unanswered questions. These questions usually relate to how much they can expect to receive, the timing of the payments and where it comes from. Employees which are due wage, holiday and pensions arrears, become preferential creditors and for those due a redundancy payment will be classed as unsecured creditors.
While the government issues guidance for employees via the Redundancy Payments Service and provides contact numbers for individual offices, those with experience of attempting to contact them will appreciate how difficult, time-consuming and frustrating this process can be.o individuals and families and therefore we prioritise employee claims to ensure they receive their entitlement as quickly as possible and also provide support and assistance to individuals.
A breakdown of redundancy payments
Payments are made up of arrears of wages, accrued holiday pay, notice pay and redundancy (subject to length of service). The Redundancy Payments Service will pay each element of claim up to a maximum of £430 per week.
Directors themselves, are also entitled to a redundancy payment. Just as any normal employee, if a director meets the right criteria and they’re eligible they are able to receive a redundancy payout
Company closure can have a devastating effect on employees, who still have financial responsibilities and sometimes, people who depend on them. Repayments to staff is a big issue and one that here at Wilson Field, we always look to prioritise.
So to make the process run as smoothly as possible, here are a few guideline points;
- Return – Make sure your RP1 form to the insolvency practitioners’ office as soon as possible.
- Ensure – Complete your RP1 form as much as possible.
- Don’t – Be sure to ask plenty of questions, don’t be afraid to ask your insolvency practitioner for any help.
- Understand – Your claim will have several different elements, it’s important to understand that things will change slowly over time.
- Never – Be sure to send your RP1 direct to the Redundancy Payments Service.
- Don’t – Make sure that all your forms are returned and you haven’t missed any.
- Acknowledgement – The payment you will receive will be sent directly to employees from the Redundancy Payments Service.
- Notice – Pay is subject to deductions such as jobseeker’s allowance, irrelevant of whether you’ve claimed. Therefore, ensure you sign on if entitled.
- Check – Ensure that your payment is correct and speak to your insolvency practitioner if it’s incorrect.
- You – Check all dividend prospects with the insolvency practitioner regarding any balance of your entitlement.
Redundancy is rarely a pleasant experience, and you may feel like you’re being kept in the dark if not all the information you need is readily available. If you’re entitled, the payments you’ll receive are partly made up by the government’s Redundancy Payments Service, and includes wage arrears, accrued holiday pay, notice pay and potentially redundancy pay, depending on how long you’ve worked for the company. As your insolvency practitioner, we understand how much of a frustrating experience dealing with redundancy can be, so we do our utmost to make sure to complete them as soon as possible.