Conditions of Employment: Insolvency
The question
To ask the Secretary of State for Business and Trade, if he will make it his policy to strengthen employee rights for those who were employed by an employer that has become insolvent.
Answered by Justin Madders
When an employer enters insolvency, the Government’s Redundancy Payments Service (RPS) can pay statutory amounts owed to employees from the National Insurance Fund. These include redundancy pay, holiday pay, arrears of pay, compensatory notice pay and pension contributions.
In 2023-24 RPS paid out more than £490 million in redundancy and related payments, with claims processed in an average of 10 days.
It is important to ensure that employees are not left in vulnerable situations where their employer has become insolvent. It is also important to ensure that the framework provides good value for taxpayers.
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