A specialist HR Law firm Nockolds recently obtained data from The Insolvency Service under the Freedom of Information Act, showing that there is a large increase in the number of employees who are owed money from their employer in an Insolvency situation.
When a company enters into Insolvency the employees are able to make claims to The Redundancy Payments Service for arrears of wages, pay in lieu of notice, holiday pay, unpaid pension contributions and redundancy pay.
Over the last twelve months the following has been paid by The Redundancy Payments Service:
- Arrears of Wages – £52.5 million, an increase from £29 million in 2021/22 and £13.7 million in 2020/21.
- Redundancy Pay – £214 million, an increase of £140 million in 2021/22 and £169 million in 2020/21.
The Redundancy Payments Service will then submit a claim to the office holder for the amounts paid to the employees, however the return on these payments is generally minimal due to more companies now having less assets to be realised.
