The Rise in UK Insolvencies: What are you entitled to?

We’re only in February 2024, and already a raft of well-known companies have either gone into administration or have reported financial difficulties, including The Body Shop, Superdry, VBites and Yodel.

This follows a worrying trend that has seen the closure of several major household names, such as Wilko, Debenhams, Lloyds Pharmacy, Cath Kidston, M&Co and Flybe, just to name a few.

It has been widely reported across the media that the increase in insolvencies is the worst the UK has seen since the financial crisis in 2008, with The Guardian recently reporting that 47,000 UK businesses are on the ‘brink of collapse’.

However, such headlines often mask the consequences that such closures have on workers and their families up and down the UK, who are left in limbo, with no means of funding their day-to-day and long-term expenses.

When a company goes bust, employees are normally made aware of their right to claim for notice pay, holiday pay, redundancy pay and loss of wages by submitting a Redundancy Payment Form (RP1).

However, employees often don’t realise that they’re likely also entitled to an additional 13 weeks’ pay by way of a Protective Award.

A Protective Award is a type of compensation awarded by an Employment Tribunal when an employer fails to properly consult with employees before making redundancies or transferring their employment to another company. It’s essentially a penalty for the employer’s failure to follow legal requirements.

Here are the key points:

When is it awarded?

• If 20 or more employees are made redundant at the same workplace within a 90-day period, and the employer fails to properly inform and consult about the redundancies beforehand.
• If employees are transferred from one company to another, and the employer fails to properly inform and consult about the transfer beforehand.

Who is eligible?

• Any employees who are affected by the redundancy or transfer are eligible to claim.

How much is it?

• The maximum amount is 90 days’ gross pay.

• If your former employer is insolvent, the Insolvency Service will pay the award, but capped at 8 weeks’ pay.

How can MSB Solicitors help?

You can only obtain a Protective Award if you make a claim at the Employment Tribunal and are   included on the Judgment.

MSB Solicitors are leaders in Employment Law. Our Head of Department, Steven Davies, was involved in early leading cases such as the Woolworths Group plc and Comet administrations, where he acted in-house, advising major trade unions.

Since then, we have recovered hundreds of thousands of pounds in compensation for our clients.

We can usually deal with your case on a “No-Win No-Fee” basis. Although we’re confident of obtaining a successful outcome for you, if we’re not able to recover any compensation on your behalf – it won’t cost you a penny.

We’ll also deal with your case from start to finish. We can represent you at any court hearing – unlike other firms of solicitors, we don’t need to instruct expensive Barristers to undertake this task.

If you have any queries regarding any of the above, please get in touch with MSB on 0151 281 9040 or email Steven Davies at stevendavies@msbsolicitors.co.uk.

Alternatively, if you want to make a claim for a Protective Award, please complete and submit your details using the following link. We’ll be in touch straight away to explain the process and get started on your claim.