Insolvent employers

Statutory redundancy pay is one of the ‘debts’ owed by an employer to an ex-employee which can be claimed, if the employer becomes insolvent, from the Department for Business, Information and Skills’ Redundancy Payments Office. You will sometimes see this referred to as the “NI Fund”. It guarantees to pay certain payments in the event of an employer becoming insolvent,


The payments that can be made are:-

  • Unpaid wages (up to 8 weeks);
  • Up to 6 weeks holiday pay (if accrued in the previous 12 months before the insolvency) and
  • Statutory notice pay
  • Statutory redundancy pay
  • basic award for unfair dismissal (though not the compensatory award)


The correct application form (RP1) needs to be completed and sent to the Redundancy Payments Office. The RPO will only pay if the employer is insolvent and not just because he or she has stopped trading.


Redundancy pay can also be claimed, even if the employer is not insolvent. where the employee has obtained a judgment from the ET that they are owed redundancy pay and the employer simply refuses to pay.

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