Kcn issue 30 apr may 18

Page 18

What the liquidators don’t tell you

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At a time when mass redundancy due to the financial failure of employers is a timely topic, it is worth reviewing an oftenoverlooked right of employees: their entitlement to protective awards. When collective redundancy situations arise, employers must consult with the representatives of affected employees before they start the process. If they fail to do so, the employees can be entitled to up to 90 days pay, called a ‘protective award’. Where an employer becomes insolvent, the government can make these awards through a fund called the National Insurance Fund (commonly abbreviated as ‘NIF’) which is, partially, designed to cover these situations. While it is not guaranteed that everything owed to you will be paid, the main payments that you can claim are up to 8 weeks arrears of wages, statutory notice pay, holiday pay, and redundancy pay. A limit applies to the maximum rate of pay per week that can be claimed under all of these headings, and that rate is currently £489/ week. If an employee earns more than that, the NIF will only pay out at that rate, leaving some of their claim unpaid. Before the NIF will make any payment, however, an employment tribunal must order that you are entitled to the protective award. While company administrators or liquidators will usually tell employees all about claiming pay, notice, redundancy and holidays from the NIF, they rarely inform employees about the right to claim for a protective award. Raeburn, Christie, Clark & Wallace would be happy to guide you through this often stressful and difficult process. For more information please contact a member of the employment team.

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18 KCN Issue 30 - Apr-May '18.indd 18

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04-Apr-18 9:06:24 PM


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