Corporate and employment law
...benefits an individual is eligible to claim will be deducted from the statutory notice period...
year the employee was employed, up to a maximum of twelve weeks.
Where to claim Anyone who was an employee and is a UK or EEA (European Economic Area) national, or a foreign national with permission to work in the UK, can apply for the money they are owed. Eligible individuals should apply within six months of dismissal. Where there is a request to claim for loss of notice pay, this should be included in the application, and a letter will be sent out to confirm to individuals when they are able to apply for it. Applications can be made as soon as someone has been made redundant, but individuals must have the ‘CN’ number that the ‘insolvency practitioner’ would have provided them with. Applications for redundancy, unpaid wages and holiday pay can be made here.
The process for claiming loss of notice pay is slightly different, and applicants require a ‘LN’ reference number in order to submit a claim. This will be sent after an individual’s notice period would have ended, which is ordinarily no more than twelve weeks after dismissal. Even where employees are not owed any redundancy money, they must apply for redundancy first. Applications for loss of notice pay can be made here. Anyone struggling to complete the online forms, should contact the Redundancy Payments Service for assistance. They will need their ‘CN’ number or National Insurance number. The team can be contacted at Compulsory liquidation – A winding- up order obtained from the court by a creditor, shareholder or director. See Liquidation for details on the process. Creditors’ voluntary liquidation – Shareholders of a company can themselves pass a resolution that the company be wound up voluntarily. See Liquidation for details on the process. Debt relief order (DRO) – A form of debt relief available to those who have a low income, low assets and less than £20,000 of debt. There is no distribution to creditors, and discharge from debts takes place twelve months after the DRO is granted. Deed of arrangement – An alternative way for a debtor to deal with their affairs than entering into bankruptcy or an individual voluntary arrangement (see below). Deeds of arrangement require the approval of a simple majority of creditors in number and value, and do not require a nominee, report to court or a meeting of creditors to be held. Individual voluntary arrangement (IVA) – This is a means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by LIPs.
redundancypaymentsonline@insolvency. gov.uk. It can take up to six weeks to receive payment, but it can be longer. Information will be checked against employer records to establish, for example, how much holiday someone had accrued. Any benefits an individual is eligible to claim will be deducted from the statutory notice period, even where benefits were not claimed. If an application is rejected, the advice is to contact the Redundancy Payments Service which will give the reasons for the rejection. Where an individual disagrees with the decision, they can make a claim to the employment tribunal. n Liquidation – This is a legal process in which a liquidator is appointed to ‘wind up’ the affairs of a limited company. The purpose is to sell the company’s assets and distribute the proceeds to its creditors. At the end of the process, the company is dissolved – it ceases to exist. Partnership winding-up orders – This is similar to the liquidation of a company. When the partners have decided that the partnership has no viable future or purpose then a decision may be made to cease trading and wind up the partnership. There are two basic ways that the partnership can be wound up: the creditors petition and a partner’s petition. Protected trust deeds – These are voluntary arrangements in Scotland and fulfil much the same role as IVAs in England and Wales. However, there are differences in the way they are set up and administered. Receivership appointments – Administrative receivership is where a creditor with a floating charge (often a bank) appoints a LIP to recover the money it is owed. Sequestration – This fulfils much the same role in Scotland as bankruptcy in England and Wales.
Glossary of terms linked to insolvency
Administration – The objective is the rescue of the company as a going concern, or if this is not possible then to obtain a better result for creditors than would be likely if the company were wound up. A licensed insolvency practitioner (LIP), ‘the administrator’, is appointed to manage the company’s affairs, business and property for the benefit of the creditors. Bankruptcy – A form of debt relief available for anyone who is unable to pay their debts. Assets owned will vest in a trustee in bankruptcy, who will sell them and distribute the proceeds to creditors. Discharge from debts usually takes place twelve months after the bankruptcy order is granted. Bankruptcies result from either debtor application – where the individual is unable to pay their debts, and applies online to make themself bankrupt, or by creditor petition – if a creditor is owed £5,000 or more, they can apply to the court to make an individual bankrupt. Company voluntary arrangement (CVA) – These are a voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all creditors. CVAs are supervised by LIPs.
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| Professional in Payroll, Pensions and Reward |
Issue 65 | November 2020
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