Employer Gone Bust? Your Rights to Redundancy, Wages and Holiday Pay
You claim from the government, not from your former employer. The insolvency practitioner will give you a case reference number, and you use it to claim statutory redundancy pay, arrears of wages, holiday pay and notice pay from the Redundancy Payments Service on GOV.UK. It does not matter that the company has no money left.
To be straight with you: K2 works with company directors on turnaround and restructuring. We are not the people who pay your redundancy and we cannot process your claim. This page exists because people land on our insolvency notices looking for exactly this information, and sending you away with nothing would be no help at all. Everything below points you at the right place.
Who actually pays you
The single most important thing to understand is that you are not queuing behind the bank for your redundancy money. Statutory payments to employees of an insolvent employer come from the National Insurance Fund and are administered by the Redundancy Payments Service, part of the Insolvency Service. Whether the company has assets left makes no difference to those payments.
Your route in is the insolvency practitioner appointed over your employer. They notify the Redundancy Payments Service, upload the employee records, and give you a case reference number — usually called a CN number. You cannot complete an online claim without it, so if you have not received one within a couple of weeks, contact the practitioner named in the Gazette notice and ask for it directly.
Anything owed to you above the statutory caps does not disappear, but it changes character: it becomes a claim in the insolvency itself. Part of that ranks preferentially, ahead of ordinary suppliers, which is one of the few genuine advantages employees have in an insolvency. The rest is unsecured and, realistically, may pay nothing.
What you can claim
Statutory redundancy pay
Requires at least two years' continuous service. Calculated from your age, length of service and weekly pay, with weekly pay capped at a statutory maximum and service capped at twenty years.
Arrears of pay
Wages you had earned but had not been paid before the insolvency, for a limited number of weeks and subject to the same weekly cap. This can include certain commission and bonus amounts already earned.
Holiday pay
Holiday accrued but not taken, and holiday taken but not paid, for a limited number of weeks within the twelve months before the insolvency, again subject to the weekly cap.
Statutory notice pay
One week per year of service up to twelve weeks. Claimed separately and only once your notice period has actually expired, and reduced by anything you earned or could have claimed in benefits during it.
The statutory weekly cap and the maximum number of weeks for each element are set by government and reviewed every April. We have deliberately not printed the figures here, because a stale number is worse than none — check the current rates on GOV.UK before you calculate what you are owed.
How to make the claim
1. Get your case reference (CN) number
It comes from the insolvency practitioner. If it has not arrived, contact them and ask — their name and address are on the notice in The London Gazette.
2. Collect your details
You will need your National Insurance number, bank details, start date and leaving date, gross and net pay, and recent payslips or your P45 if you have them. Getting your dates right matters — mismatches against the company payroll are the main cause of delay.
3. Claim online on GOV.UK
Redundancy, arrears of pay and holiday pay are claimed together. Notice pay is a separate claim you make after your notice period has ended.
4. Keep everything
Payslips, contract, any redundancy letter, and a note of who you spoke to and when. If a figure is disputed later, your own records are what settle it.
Timescales and deadlines
Most complete claims are paid within a few weeks. Delays are usually caused by one of three things: the insolvency practitioner has not yet uploaded the employee records, your details do not match the company's payroll, or the claim is for notice pay, which cannot be processed until the notice period has actually run out.
Claim within six months of your employment ending. A claim made between six and twelve months can still be accepted where there is a good reason for the delay, but after twelve months it will generally be refused. Do not wait to be chased.
If you think you were dismissed unfairly, or that the company failed to consult properly before making a group of people redundant, those are separate claims to an employment tribunal with their own — much shorter — time limits, typically three months less one day. Take advice quickly; ACAS is free and is the right first call.
If the business is sold rather than closed
Not every insolvency ends in everyone losing their job. In an administration, and particularly in a pre-pack, the business or part of it is often sold as a going concern. Where that happens TUPE may apply, and your employment can transfer automatically to the buyer on your existing terms with your continuous service preserved.
If your job transfers, you have not been made redundant and there is no redundancy claim to make. Certain debts already owed to you can still be met by the Redundancy Payments Service rather than passing to the buyer, which is one of the features that makes rescuing a business out of administration possible at all.
Whether TUPE applies turns on the specific facts of the sale. Ask the administrator directly and in writing what is happening to your contract, and read how a pre-pack administration works if that is the route being taken.
Contractors and the self-employed
The Redundancy Payments Service scheme covers employees. If you were genuinely self-employed, a consultant, or engaged outside an employment contract, you are an ordinary unsecured creditor of the insolvent company and you claim by submitting a proof of debt to the insolvency practitioner — with the same poor prospects as any other unsecured creditor.
Employment status is decided on the reality of the working relationship, not the label on the paperwork. If you worked set hours, under the company's direction, without the right to send a substitute, it may be worth taking advice on whether you were in fact an employee.
Frequently asked questions
Who pays my redundancy if my employer has gone bust?
The government, through the Redundancy Payments Service, out of the National Insurance Fund. You do not claim from the failed company and it does not need to have money left. The insolvency practitioner gives you a case reference (CN) number and you claim online on GOV.UK. Amounts above the statutory caps become a claim in the insolvency itself.
What exactly can I claim?
Statutory redundancy pay (needs two years' service), arrears of pay, accrued holiday pay and statutory notice pay. Each is subject to a weekly cap and a maximum number of weeks, both reviewed each April — check current figures on GOV.UK. Notice pay is claimed separately once your notice period has expired.
How long will it take to be paid?
Most complete claims are paid within a few weeks. Delays usually come from missing employee records, details that do not match the payroll, or notice pay — which cannot be processed until the notice period has actually ended.
Is there a time limit?
Claim within six months of your employment ending. Between six and twelve months it may still be accepted with a good reason for the delay; after twelve months it is generally refused.
What if the business is sold instead of closed?
TUPE may apply and your employment can transfer to the buyer on your existing terms with continuous service preserved — in which case you have not been made redundant. Some outstanding debts may still be met by the Redundancy Payments Service. Ask the administrator in writing what is happening to your contract.
Am I covered if I was a contractor?
Generally no — the scheme covers employees. Genuinely self-employed contractors are ordinary unsecured creditors and must submit a proof of debt instead. Employment status depends on the reality of the relationship rather than the contract label, so if you worked set hours under the company's control it may be worth taking advice.
Where to get help
These are the organisations that can actually act on an employee claim. All are free.
Related Guides
Understanding what has happened to the business you worked for.
What Is Liquidation?
The three types of liquidation and what each means in practice
Company Administration
The rescue procedure, and why jobs sometimes survive it
Pre-Pack Administration
How a business is sold immediately on appointment, and what happens to staff
Who Gets Paid First?
Why employees rank ahead of ordinary suppliers, and by how much