What to Do If Your Employer Stops Trading

Author:
Stephen Pinder
Partner, Employment Law Solicitor
Date:
21/02/2020

When a company stops trading, goes out of business or has gone into administration, employees in England and Wales may be entitled to a claim for a Protective Award from the Employment Tribunal if collective redundancies have taken place without proper consultation.

You may be entitled to a Protective Award in the above scenario if:

  • You’re based in a single workplace or location
  • 20 or more employees are made redundant
  • The employer fails to correctly inform and consult staff about redundancies

In these cases, employers have a legal duty to consult with employees or their representatives before the redundancies are made. It’s very likely that when companies suddenly stop trading in such style, such as the Jamie Oliver Restaurant Group and Thomas Cook, the employer will have breached this duty and a Protective Award claim can be brought by the employees in the Employment Tribunals.

Our Employment Law Solicitors are specialists in Protective Award claims and offer a free initial consultation to former members of staff at Thomas Cook. We successfully represented ex-employees at Monarch Airlines following its collapse 2 years ago. We may be able to deal with your claim on a No Win, No Fee basis - ask us for details.

Call us on 08002605010 or request a callback and we will help you.

How Much Can the Employment Tribunal Award?

Where the company is in administration, the National Insurance Fund guarantees payment of the Protective Award of up to 8 weeks’ pay, but the National Insurance Fund does cap a week’s pay for these purposes at £525 (subject to an annual increase).

This means that in effect, each employee is guaranteed up to approximately £4,200 from the National Insurance Fund. But in order to claim the value of the Protective Award, employees concerned must have an Employment Tribunal judgement in their favour.

Time Limits for Making a Protective Award Claim

There are very strict time limits for making Protective Award claims. Claims must be made within three months less one day of the date of your dismissal. So it’s important not to delay in getting legal advice from an Employment Law Solicitor, so they have time to prepare your case.

ACAS Early Conciliation

As with any claim being brought to an Employment Tribunal, you must first obtain an ACAS Early Conciliation Certificate Number. This is done by entering into Early Conciliation with ACAS.

For Protective Awards claims, it’s easier to do this once, on behalf of all employees. The effect of Early Conciliation is that it can extend the three months less a day deadline, but also provides claim numbers for each employee wishing to make a Protective Award claim. Without this, you will not be able to submit a claim to the Employment Tribunal.

Can I Claim Anything Else?

Yes you can. You should talk to the administrator about claiming back any notice pay, holiday pay and redundancy pay that you may be owed.

Your notice period will be listed in your terms and conditions of employment, but there are minimum statutory notice periods. This means you will get 1 week of pay for each year of service up to a maximum of 12 weeks.

You can calculate your holiday entitlement easily online at gov.uk. This will help you work out exactly what you are owed.

Any redundancy payment will depend on your length of service. Whether you are eligible at all and the amount you receive will be decided by the length of time you worked for your employer.

Why Do I Need an Employment Law Solicitor?

Protective Award claims are complex, especially in cases of insolvency, and permission is legally required by the insolvency practitioners or the High Court to make a claim. Our Employment Solicitors aim to make the process of claiming for a Protective Award as stress-free as possible and will reduce any work you need to do to a minimum.

We can collate information from employees who wish to join the claim, correspond with ACAS to obtain the required documentation on your behalf, correspond with the Administrators and/or the High Court to obtain permission to pursue a claim, and bring the claim itself to the Employment Tribunal.

Furthermore, at Simpson Millar Solicitors, we have an in-house expert who can represent you at the Employment Tribunal on the day of the Hearing. This allows us to keep your costs to the absolute minimum, as you won’t need to pay expensive Counsel Fees to represent you at the Employment Tribunal.

For more information on fees, the Protective Award process or how to sign up to make a claim with us, contact our Employment Solicitors below.

For free initial legal advice call our Employment Solicitors

We're happy to help

Monday to Friday 8:30am-7:00pm

08002 605 010

08002 605 010

We're happy to call you

Simply click below to arrange a call

Request a call back

Request a Callback

This data will only be used by Simpson Millar in accordance with our Privacy Policy for processing your query and for no other purpose

Simpson Millar is a national law firm with over 500 staff and offices in Bristol, Cardiff, Lancaster, Leeds, Liverpool, London - Euston, London - Fleet Street, London - Teddington, Manchester and Southport.