How your employment can come to an end - for employees

There are various ways your employment can come to an end, but if you’re an employee you have the right not to be unfairly dismissed. Since the 1st October 2011, those defined as ‘agency workers’ have had the right not to be unfairly dismissed for reasons relating to the Agency Workers Regulations.

If you’re a freelancer/contractor, check out our article on what rights you have if your client cancels your contract here.

Giving notice

You or your employer can give notice to end your employment if you’re a permanent employee (you can find more information on probationary periods in our “Probationary period myths dispelled” article).

Your contract should contain reasonable notice periods that you or your employer can give each other. There are minimum periods of notice required by law, which are:

• You must give your employer a minimum of one week’s notice if you resign and have one or more month’s service
• Your employer must give you one week’s notice if you have between one month and less than two years service; at least two weeks notice if you have been employed continuously for two years; and an additional week’s notice for each further complete year of service (up to 12 weeks) 
• If you’ve been employed on very short fixed-term contracts of under one month which have been extended (each time for under one month), you’ll be entitled to one week’s notice once you’ve been continuously employed for three months

Your employer can, however, end your contract without notice if your conduct justifies it. This is known as ‘gross misconduct, which we’ll be covering in a little more detail later.

However, your contract may specify longer periods of notice that you’d need to give if you are resigning, or your employer would need to give you if they were dismissing you. You may be able to agree with your Employer that you can give less notice than you should (but they do not have to agree to this)  but your Employer has to give you the minimum legal minimum notice periods (above). In addition, your Employer may contractually require you to accept a payment in lieu of working the full notice period, if they require this.

If you resign with immediate effect and refuse to work your full notice period, you’ll technically be in breach of contract – unless your employer has acted in a way towards you that represents a fundamental breach of contract – and your employer can refuse to accept your resignation; generally they won’t though but they do not need to pay if you refuse to work your full notice period.

The Courts don’t have the authority to compel an employee to work, but the employer can apply for an injunction to prevent you from working for a competitor during the outstanding part of your notice period. An employer could also sue an employee for breach of contract, but this is very unlikely due to the expense involved. Your employer may also refuse to provide a reference for you to any future employers, if you leave without giving your full notice period.

Dismissal without notice

If you’re dismissed without being given the proper notice required by your employer (the legal minimum or your contractual notice, whichever applies), your length of service is calculated by adding on the legal notice you should have been given. However, if you’re calculating your service to make an Employment Tribunal claim (for unfair dismissal for example), your employment is treated as having ended on the day you were dismissed (i.e. if you are making a Tribunal claim you normally have to do this within three months of the event, so you need to include your notice period within this three month time limit).

In Newcastle Upon Tyne NHS Foundation Trust v Haywood 2017, the Court of Appeal looked at when notice of termination was effective. The Employer had given notice to the employee while she was away on holiday – by emailing her husband and posting the letter by recorded delivery and normal post. The contract did not contain any terms setting out when notice would take effect. The Court felt the employer was not authorised to communicate with the husband and that, since the employee did not read the letter until she returned home, the date the termination took effect was the date she personally read the letter. The date was significant for Haywood because she was turning 50, which would have entitled her to a higher pension.

Retirement

Before 1st October 2011, you could be retired if you reached the default national retirement age of 65. This automatic default retirement age was removed from 1st October 2011 – for details see our updated Guide to Retirements here.

Fixed term contracts

Where you are employed on a Fixed Term contract, your written statement should state the date the contract is expected to end. Generally your employer doesn’t have to give you notice of this expiry date, as the contract automatically expires.

However, your employer may be able to terminate your contract before it’s nominated end date, if this is written into your contract, by giving the appropriate notice period (as mentioned above).

If you don’t have a notice period in your Fixed Term contract and it ended early, this may be a breach of contract and you may be able to claim damages.

If your Fixed Term contract ends on its expiry date and is not renewed, or you are given notice to end it early, and you have two years continuous service with your employer, you are entitled to ask for a written statement from your employer explaining the reasons for your contract ending (as this is effectively a dismissal).

If you’re unhappy about your contract ending and not being renewed, then you should have the right to ask for an appeal under your employers dismissal procedure.

For more details about Fixed Term Contracts ending, please see our article on Fixed Term Contracts. For details about being employed on a Fixed Term contract during maternity leave, please see here.

Forced resignations (constructive dismissal)

You may feel that you have no choice, because of the way your employer is treating you, that you are being forced to resign. This is called constructive dismissal.

There are several reasons why you may decide to terminate your employment and claim constructive dismissal, including:

• A breach of your contract, such as your employer not paying you or suddenly demoting you for no reason
• Your employer forces you to accept unreasonable changes to your conditions of employment without your agreement
• Where the employers behaviour has breached the term of mutual trust and confidence that’s implied in all contracts of employment (employers and employees can’t conduct themselves in a manner that’s likely to destroy or seriously damage the relationship between the two parties), such as humiliation, bullying, harassment or violence against you by a coworker
• Making you work in dangerous conditions.
• In July 2021 an Employment Appeal Tribunal found that discriminatory harassment could lead to a successful constructive dismissal claim. In Driscoll v V & P Global Ltd,   Ms Driscoll resigned because of harassment on the grounds of sex, race or disability and claimed constructive dismissal.  The original ET struck out her constructive dismissal claim because of a previous EAT decision from 2015.  The EAT in 2021 disagreed and said the previous case (Timothy James Consulting Ltd v Wilton 2015) was inconsistent with UK and European law.

Although there will have been no actual dismissal, your employer’s treatment of you is sufficiently bad that you are entitled to regard yourself as having been dismissed.

In September 2013 – in Blackburn v Aldi Stores Ltd – the Employment Appeal Tribunal found that failure to provide an impartial grievance appeal process could potentially amount to a breach of the implied term of trust and confidence and form the basis of a constructive dismissal claim; the same Manager had heard the Grievance and the Appeal, and the EAT found that an organisation of Aldi’s size should be able to provide an independent hearing by a manager not previously involved in the case.

In July 2016 in Nicholsdon v Hazel House Nursing Home Ltd, the employee who was pregnant asked her nursing home if she could switch shifts from the morning to the afternoon, which her employer agreed to do, but then reduced her shifts from five to three a week without consulting her. This meant she qualified for maternity allowance only not Statutory Maternity Pay (SMP). She put in a grievance which was rejected. She then resigned and later put in an appeal against the grievance decision but she then did not respond to the request for further information and the appeal was not held. The case went to the Employment Appeal Tribunal who said she had been constructively unfairly dismissed and the reduction in shifts was pregnancy discrimination.

However, before you resign and claim constructive dismissal you should raise an internal grievance first, otherwise an Employment Tribunal may refuse to hear your constructive dismissal claim or reduce any compensation you may receive. Constructive dismissal is notoriously difficult to prove so tread carefully and take advice from a qualified person. To succeed in a constructive dismissal claim, the employee has to show that they have resigned in response to a fundamental breach of their contract by the Employer. 

Employees shouldn’t leave too much time between the employer’s breach of contract and your resignation - if you do you may be deemed to have accepted or waived that breach. 

There is no time period laid down in law - it depends on all the circumstances.  You can resign by giving notice (you do not have to walk out immediately) but ideally the notice you give should be no longer than your normal contractual notice, as this is likely to invalidate your claim (as you have affirmed the contract by staying working for the Employer for a long period). Similarly, if you are on sick leave and feel you are in a constructive dismissal situation you should not accept sick pay over a long period of time before resigning.  Also, the employee’s personal circumstances may dictate how long the employees needs to make up their mind to resign (sole family earner, likely re-employment prospects etc.). 

Read our article here for more information on what to do if you are unhappy about changes your Employer is making to your contract/terms and conditions of employment.

In Chindove v William Morrisons Supermarkets in August 2014 the Employment Appeal Tribunal found that the fact an employee was on sick leave was a relevant consideration when determining whether a delay in resigning would prevent a claim for constructive dismissal.

In August 2018, in Decker v Extra Personnel Logistics Ltd, a recruiter who refused to accept a pay cut successfully won a constructive dismissal claim at Employment Tribunal. Mr Decker was employed from 2008, until he left in July 2017, claiming constructive dismissal. He initially worked 40 hours per week but this was cut to 32 hours in 2015, and in February 2017 he was asked to cut his hours to 16 per week, as the agency had lost two contracts – this would have meant him losing £205 pay per week. Decker said he could not afford this but was willing to reduce his hours to 24 per week if his daily rate was increased from £102.97 to £110.00. Mr Decker thought the Company had accepted this but on 1st June 2017 the MD said they could not offer a pay rise and asked him to sign a new contract. Decker resigned on 5th June 2017. The tribunal felt the employer “had fundamentally breached” Decker’s employment contract and had not followed the Acas code of practice on disciplinary and grievances (as they felt an e-mail from Decker laying out the issues he had with the company’s action had failed to be treated as a grievance).

In February 2020, in MacLean v Menzies Distribution Limited, an employment tribunal found that Mr MacLean, who was a General Manager, was constructively dismissed when Menzies Chief Financial Officer emailed MacLean, and 15 others, blaming MacLean for the company’s poor financial performance in Scotland.  This was a repudiatory breach of MacLean’s employment contract.

In December 2020, in Comberg v VivoPower International PLC, the High Court found that the employer who had intentionally withheld Comberg’s salary for three days was in repudiatory breach of contract, entitling the employee to resign without notice. Dr Comberg was CEO at VivoPower and following disputes with the founder gave 12 months notice to terminate his employment in September 2017. He was not paid at the end of October 2017 and, despite e-mailing VivoPower about the isse, he was still not paid. On 3rd November, he terminated his employment. Dr Comberg claimed in the High Court that he had been wrongfully dismissed and the Court upheld his claim.

In March 2021, in Gordon V J&D Pierce Ltd, the Employment Appeal Tribunal disagreed with the original Employment Tribunal who had felt that Mr Gordon, by exercising his right to make a grievance, could not have been constructively dismissed.  

The EAT said that exercising a right to make a grievance or appeal a disciplinary decision should not be regarded as an ‘affirmation’ of the contract between the employee and employer.  Grievances or appeals can survive even if the rest of the contract is regarded as terminated by a breach of the contract by the employer. Therefore an employee will not undermine their constructive dismissal claim by using the employer’s grievance process or appealing an employer’s disciplinary decision.

Fair dismissals

There are various reasons why your employer can dismiss you – there are fair and unfair reasons.

If you have been employed continuously by your employer for two years, you have a right to request a written statement explaining why you’ve been dismissed and whether you’ve received notice or not. 

Regardless of the reason for your dismissal, your employer must act fairly in the procedure they follow to dismiss you.

There are five potentially fair reasons for an employer to dismiss you.

1. Poor conduct

You break a term of your employment – e.g. behaviour that is thought to be unacceptable. This can include:

• Continually missing work
• Poor time-keeping
• Refusal to obey a reasonable instruction
• Poor discipline
• theft or dishonesty (which can include lying about sickness). 

Your employer should follow a fair disciplinary policy to dismiss you for such misconduct. 

Some forms of unacceptable behaviour are so bad they are called gross misconduct, e.g. behaviours such as theft and violence, harassment of customers and employees, drinking or taking drugs at work (and see our new information on Drug Driving Regulations here) – your employer should outline what ‘gross misconduct’ means in your Company, as each organisation will have its own take on what gross misconduct means, depending on the business and other factors.

You can, in certain circumstances, also be dismissed for misconduct outside of the workplace (you damage the Company’s reputation). 

Dismissals for gross misconduct can be ‘summary’, i.e. serious enough that you will not receive notice to end your employment. If your employer follows a fair procedure, dismissal for gross misconduct will probably be a fair dismissal if they can show that at the time of the dismissal they believed the employee to be guilty of misconduct and that they had reasonable grounds for believing this, having carried out “as much investigation into the matter as was reasonable in all the circumstances”.

2. Your capability

This is when you can’t do your job properly or are not performing to the required standards – e.g. you don’t get along with working practices, colleagues or new technology, or you have long term or frequent illnesses that make it impossible for you to do your job. 

To make this a fair dismissal your employer needs to make sure you’ve had adequate training to do your job and that you’ve had at least one warning that your work isn’t satisfactory and they have given you a chance to improve. If you’re off sick, your employer needs to make sure that the job is suitable for you and you’ve had adequate time to recover. If you’re dismissed on the grounds of incapacity (for health reasons), your employer must have followed a fair procedure which will include consultation with you and must have obtained medical evidence to determine whether you can continue to be employed/whether your sickness levels will continue at the same level. 

Courts, when considering if a dismissal for ill-health is fair or unfair, will consider whether the employer could reasonably be expected to wait any longer for the employee to be fit to return to work (which will include looking at factors such as whether the employee has exhausted their sick pay, whether the employer needed to call on temporary staff and the size of the company); the extent to which the employee has been consulted with and his/her views taken into account and whether these views were properly balanced against medical opinion; whether reasonable steps had been taken to discover the employee’s medical condition and likely prognosis; and the length of service. 

Employers can reasonably request that an employee provides them with information about the nature and extent of their injury//illness to allow the employer to ascertain the likely length of any absence, but employers are recommended to arrange for a medical opinion to be sought as well. If you’re disabled, your employer has a legal duty to try to make ‘reasonable adjustments’ to how/where you work and has to take into account the new provisions under the Equality Act 2010.

3. Redundancy

This applies when there is no more, or not enough, work for you and/or others (where for example your employer closes or relocates the business or now needs fewer workers). Your employer needs to be genuinely making redundancies, needs to select those who are at risk of redundancy in a fair way, consider offering you any suitable alternative work, consult you properly before making you redundant and pay you your Statutory Redundancy Pay entitlement. Without all these steps being taken, your redundancy could be seen as an unfair dismissal. See our detailed article here about redundancies.

4. Statutory Restriction

You can be dismissed if continuing to employ you would break the law – e.g. if you’re a driver and you lose your driving licence (your employer would be expected to look for other suitable work for you before dismissing you, if that was possible), or if you lose the legal right to work in the UK.

5. Some Other Substantial Reason (SOSR)

You can be dismissed in this way if your employer is in a situation where they have an overwhelming reason to dismiss you (they would be expected to look at any alternatives to dismissing you beforehand, e.g. moving you to a new job if possible etc.), such as:

• Your imprisonment
• An unsolvable personality clash
• The business is relocated and they can’t continue to employ you
• If you unreasonably refuse to accept a company reorganisation that changes your employment terms (you may be dismissed and re-engaged on new terms) *
• If an employee is dismissed because of safeguarding concerns (of children or vulnerable adults) but there are no other misconduct dismissal grounds
• If your fixed-term contract to cover maternity leave is not renewed. 

* Employers ‘Fire and Rehire’ practices have been in the news a lot lately and Acas have produced a guide to help Employers to avoid these practices. You can read the guidance here. After the 2022 scandal of P&O Ferries sacking 800 staff instantly, the Government said they would produce a new statutory code on the practice of ‘fire and rehire’, which intends to “clamp down on controversial tactics used by unscrupulous employers who fail to engage in meaningful consultations with employees”. The Government published the final version of the statutory Code of Practice in February 2024 which you can see here. The Government will not legislate further in this area; a statutory code does not impose legal obligations but helps explain the legal obligations under the current legislation. Tribunals take into consideration the code when considering any claims from employees.

In Masini v Compass Group UK & Ireland Ltd in October 2015 an employee was dismissed fairly under SOSR as a client had asked for the employee to be removed from working on their site – the Employer tried to resolve the situation and look for alternative work for Masini; a number of possible jobs were identified but Masini turned them down because they involved extra travel or a drop in status – she was dismissed and an appeal process followed; the Tribunal rejected her claim for unfair dismissal as it felt the employer had done what it could for her. 

If you are in prison, it may be fair for your employer to dismiss you because of your conduct or because you are unable to perform your job; the employer would need to consider factors such as the nature of the offence, the length of the sentence, the nature of the employee’s job, the effect of the employee’s absence on the business and any damage to the employer’s reputation – the employer should carry out an investigation and a fair disciplinary procedure as far as is possible in the employee’s absence 

In 2016 a Bakery worker, Joseph Carter, won an employment tribunal claim for unfair dismissal after being sacked for failing to turn up for work because he was in prison. Although the amount he was awarded was minimal (£650) because he had contributed to his own sacking, the appeal judge said the Bakery, Aulds, had made ‘procedural’ flaws in the way they handled the sacking because they had not followed any disciplinary procedures but just terminated his employment because he had ‘frustrated’ his contract.

Unfair dismissals

If you have two years or more continuous service with your employer (in England, Scotland and Wales), you may be able to make a claim for unfair dismissal at the Employment Tribunal if you believe your dismissal is incorrect; you will only need one year's service in Northern Ireland. Check out our guide for more information about continuous service.:

If your employer dismisses you for the following reasons, they are automatically unfair  - regardless of your length of service - and you may receive compensation at an Employment Tribunal if you make a claim:

• For following up your legal rights (by i.e. making a claim to an Employment Tribunal) regarding e.g. not receiving a written statement of your terms and conditions of employment, not receiving the National Minimum wage and, since April 2016, by not receiving the National Living Wage
• If you take or ask to take time off for antenatal appointments, statutory maternity leave, paternity leave or adoption leave
• For exercising your right to take time off work to accompany a pregnant woman to antenatal appointments
• For exercising your right to take time off for family emergencies (for example, in July 2022 a Tribunal awarded a claimant £8,000 after finding they were dismissed for asserting their statutory right to take time off to care for dependants, after his pregnant partner felt unwell and she had to attend an emergency hospital appointment, leaving another child and the pregnant partner needing care).
• From April 2024 for exercising your right to take a week’s unpaid Carer’s Leave.
• From April 2020  for exercising your right to Parental Bereavement Leave
• For exercising your right to take shared parental leave or parental leave
• For exercising your right to take adoption appointments
• If you ask to become a trade union member, or refuse to join a union
• If you complain about a health and safety problem (*** see below) 
• If you  report wrongdoing at work (called whistle-blowing)
• For following up your legal rights to use a grievance procedure or disciplinary procedure or your rights under the Working Time Regulations
• For taking part in official industrial action that lasts less than 12 weeks (if you take part in unofficial industrial or strike action, you can’t claim unfair dismissal)
• For taking time off for jury service
• For asking to work flexibly if you have the right to do so
• For having been discriminated against on grounds of age, race, sex, disability, sexual orientation or religion or belief – see full details of the Equality Act 2010 here
• For being put at a disadvantage or being dismissed because of your rights to automatic enrolment in a pension scheme
• For your political opinions or affiliations

For being dismissed or suffering a detriment if working under a zero hours contract that contains an exclusivity clause in the contract.

Automatically unfair dismissal for health and safety reasons

Since the arrival of Covid-19 there have been a growing number of dismissal cases working their way through the Employment Tribunal system, on grounds of Health and Safety.

We look at a few here:

• In Rodgers v Leeds Laser Cutting Limited (in March 2021) an Employment Tribunal found that an employee could not rely on health and safety reasons in an automatic (Health & Safety) unfair dismissal claim “to refuse to work in any circumstances simply by virtue of the pandemic”.  Further details are here and here.This case was appealed and the Employment Appeal Tribunal, in May 2022, agreed with the original ET decision.

• In Accattatis v Fortuna Group London Ltd (heard in April 2021), Mr Accattatis did not persuade a tribunal that his concerns for his safety at work made his dismissal automatically unfair.  Fortuna made PPE and so staff were considered ‘key workers’ and the business remained open through the first lockdown, and his job included accepting daily deliveries of equipment.  Mr Accattatis developed COVID symptoms and self-isolated but continued to feel unwell after this period.  He then asked to be furloughed but his employer refused as he was needed at work.  He asked to be furloughed two more times and his employment was then terminated.  Mr Accattatis did not quite have 2 years service so could not claim normal unfair dismissal (which he would likely have won because of the lack of procedure by the Company, at least!), so therefore bought a claim under Health and Safety laws in the Employment Relations Act 1996 section 100 – that his workplace posed a serious and imminent danger to him.  The tribunal felt that there was danger at the workplace but Mr Accatatis had not taken appropriate steps to protect himself from danger or explore ways in which the danger might be mitigated – his demands for furlough and working from home (he couldn’t do his job from home) were not appropriate steps to protect him from danger at work.

• In June 2021, in Gibson v Lothian Leisure, Mr Gibson was a chef whose father was shielding during the first lockdown in 2020.  Mr Gibson was initially put on furlough but then was asked to return to work near the end of the first lockdown.  Mr Gibson told Lothian he was worried about his father catching COVID if he returned to work, and raised concerns that the restaurant had no PPE and had no intention of creating a secure working environment.  The employer told him to “shut up and get on with it” and then dismissed him by text. As Mr Gibson did not have enough service to bring an unfair dismissal claim, he bought a claim for automatic unfair dismissal under Section 100 of ERA (as above).  The Tribunal agreed with him – he reasonably believed that the danger to him and his father was serious and imminent.

• In December 2021, in Preen v Coolink v Mullins, an Employment Tribunal had to decide if an employee was unfairly dismissed for raising safety concerns, just after the first national lockdown of 23rd March 2020. Mr Preen was an engineer working for a small company who provided emergency cover and servicing to customers, which included hospitals and the food industry. On 23rd March people were told they could only travel to and from work if it was ‘absolutely necessary’ and they could not work at home. That evening, Mr Preen contacted his manager, Mullins, to ask how the lockdown affected his work. Mullins said they could continue to go to work but could not gather socially. Preen was not happy with this and told Mullins “…I am going to stay at home and would urge you to do the same. I understand that if any call out is urgent and/or essential I will come in to help out of course…”. Mullins replied “no issues” but a few days later dismissed Mullins for ‘redundancy’ because he had refused to come to work. Preen argued to the Tribunal that he had been unfairly dismissed for raising health and safety issues under Section 100 (as above); he didn’t have 2 years service to claim unfair dismissal in the normal way. The tribunal found that Preen’s message had alerted his employer to his concerns about working during the lockdown, but they then considered whether his dismissal was also unfair under section 100(1)(d), where to succeed, Preen had to demonstrate that he had refused to come into work because of a serious and imminent danger to him and others. The Tribunal found Preen failed this threshold – they did not think he reasonably believed that he (or others) were in serious and imminent danger if they went to work; the Company had taken sensible precautions – masks, hand sanitiser and had a COVID Health and Safety procedure – and Preen had said he was willing to do emergency work which undermined his claim that this workplace was dangerous.

If you’re a Military Reservist you cannot be dismissed solely or mainly on account of any duties you have to undertake – here dismissal would be a criminal offence and protection exists irrespective of whether formal notification of mobilisation has been given to the Employer. Before 1st October 2014 you needed two years continuous service to be able to claim unfair dismissal but from 1st October 2014 this two year service requirement is removed for a military reservist who is dismissed exclusively (or mainly) because he or she is a member of the reserve forces.

What to do if you're dismissed

If you are dismissed you should first appeal under your employers disciplinary procedures before pursuing a claim at the Employment Tribunal. If you make a claim to the Employment Tribunal you usually need to do this within three months of being dismissed (unless your company’s disciplinary procedures haven't been finished). 

In 2014, ACAS launched an ‘Early Conciliation’ service which changed the way people access the Employment Tribunal system. Anyone who wants to lodge an employment tribunal claim must now notify ACAS and they will have up to a month to attempt to resolve the dispute with their employer (before lodging the claim) with ACAS’s help. If ACAS can’t resolve the matter in this period, their services will remain available right up until the case is heard by an Employment Tribunal.

You can read more details about ACAS conciliation here and the Employment Tribunals guidance from gov.uk is here and you can start the online application process here.

Compensation for unfair dismissal at an Employment Tribunal is meant to put you where you would’ve been financially if you hadn’t been dismissed.

By mutual agreement

Your employment can end by mutual agreement, but obviously this is when both parties are happy to end the employment relationship. Check out our “Pre-termination negotiations and settlement agreements” and “‘Without Prejudice’ rules explained (and how they relate to Settlement Agreements)” articles for more information.

Insolvency

Insolvency happens when an employer has no money to pay the people they owe in full, including their employees, and they have to make arrangements to meet these debts. You can find more information about redundancy and insolvency from the government’s Insolvency service.

There are different types of insolvency. If your employer is a limited company or partnership then insolvency will be either:

• Administration
• Liquidation
• Receivership
• Voluntary arrangement with creditors.

If your employer is an individual then insolvency will mean bankruptcy or a voluntary arrangement with creditors.

Usually, someone is appointed to deal with an official insolvency situation. They’ll be in charge of the situation and could be called an insolvency practitioner, official receiver, administrator, liquidator, supervisor or trustee. There are a number of things insolvency can mean for you as an employee:

• If the insolvency is official and your employer is trying to sell the business you may wish to carry on working for them (or an official administrator, receiver or liquidator) and your transfer to another company will be covered by TUPE. This doesn’t affect your rights to redundancy pay if the firm closes down later
• If the insolvency is not official, your employer, if they cannot pay you, may be forced to lay you off or put you on short-time working
• If the insolvency is official and compulsory and the business can’t be sold, your employment would terminate automatically, but you would not be entitled to make a claim for unfair dismissal
• If the insolvency is voluntary, the liquidator will inform you if your employment may be terminated. If you’re dismissed, you’ve been made redundant and may have a claim for unfair dismissal if the correct redundancy procedure is not followed.

You need to find out if your employer is insolvent or not. If your employer is still trading but you aren’t getting paid, you may be able to complain to an Employment Tribunal that there has been an unlawful deduction from your pay. In such situations, it’s often best to speak to the government’s insolvency service.

What can I claim for if my employer is officially insolvent?

If your employer is officially insolvent you may be able to claim the following from the National Insurance Fund:

• Statutory redundancy pay (based on a maximum weekly rate of £538, from 6th April 2020, increasing to £544 from April 2021)
• Wages/Pay – up to maximum of eight weeks (based on a maximum weekly rate as above)
• Holiday pay – up to a maximum of six weeks (based on a maximum weekly rate as above)
• Compensatory notice pay – based on one week (after one months service), plus one week per completed year of service (up to maximum of 12 weeks – again subject to maximum weekly rate as above)
• Unpaid contributions into a pension scheme and maternity pay
• Some debt to you – including holiday pay and wages – are classed as ‘preferential debts’ when your employers assets are shared out so should have priority.

Since 31st January 2017, employment tribunal claims relating to employees of insolvent companies, where payments are sought from the National Insurance Fund, such as redundancy payments, no longer require a fee.

Our Crunch accountants are only able to answer accountancy related questions through our Ask an Accountant service. If you have an employment question please either leave a comment below or phone the Acas Helpline on 0300 123 110.

If you are an Employer and need ongoing professional help with any staff/freelance issue then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.

Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.

Don’t have time to read this right now? Download our jargon-free PDF Redundancy Guide to keep and read later.