Q&A - My employer had gone into administration. What are my rights?

11/03/2013

Q. My employer has just gone into administration and I am concerned about my job. Can you tell me what my rights are in this situation?

A:  If your employer has been placed into administration then the insolvency practitioner appointed must believe that some sort of corporate rescue is possible.  This may include selling all or part of the business as a going concern.  Of course, that does not guarantee that you will keep your job and some job losses are probably inevitable.

If your employment is terminated then you can recover certain entitlements from the Government's Redundancy Payments Office.  You are entitled to any arrears of salary for up to eight weeks, accrued but untaken holiday for up to six weeks, payment for your statutory notice period and a statutory redundancy payment.  All payments have been subject to a statutory cap of £450 per week since 01 February 2013. The insolvency practitioner will ensure that you are provided with the correct forms to claim the payments.

If you are fortunate enough to keep your job then the Transfer of Undertaking (Protection of Employment) Regulations 2006 is likely to apply to the sale of the business.   This means that your employment rights should automatically transfer to whichever company purchases the business or the part of the business in which you are employed.

Notwithstanding the transfer of employment rights, whatever company purchases the business will probably want to make certain changes because the current business model is clearly ineffective. That may have an impact on the retained staff.  If you have any concerns in this regard then you should seek advice from an employment law expert.

Robert Williams

Robert Williams

Partner

A Partner and Head of the Civil Litigation, Personal Injury and Dispute Resolution team in Wrexham