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Insolvency Q&A part four: employees

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Welcome to part four of our five part insolvency blog covering the most frequently asked questions around insolvency and liquidation.

Part four will cover the most frequently asked insolvency questions by employees.

Part one covered general insolvency

Part two covered questions by business owners and company directors. 

Part three covered individuals and sole traders. 

For further advice about any of the topics covered in our insolvency blogs or regarding a specific scenario, please contact our insolvency & recovery specialists on 0330 024 0888 or All initial discussions are confidential, free of charge and without obligation.

  1. My employer has gone bust. What does it mean/what should I do?

If your employer has entered into a formal insolvency process, you should be notified by either the official receiver or insolvency practitioner appointed to deal with the employer’s affairs.

The office-holder should provide you with a ‘fact sheet for employees’ to explain how you can make a claim from the National Insurance Fund, which is administered by the Redundancy Payments Service (RPS), for amounts owed to you in respect of arrears of wages, unpaid holiday pay, redundancy and compensation for lack of notice. Claims are now submitted online via the Government website.

The RPS will pay you, up to statutory limits, and claim in the insolvency proceedings on your behalf for any amounts paid to you under the principle of subrogation. You may have a claim in the proceedings for any amounts not paid to you by the RPS.

The RPS aims to pay within three to six weeks of receiving a claim. However, claims for compensation for lack of notice will not be dealt with until your notice period has expired.

  1. I’ve been made bankrupt. Does my employer get told of the bankruptcy?

Your employer will usually only be informed of your bankruptcy if you fail to comply with an income payments agreement. The trustee can then make an application for these funds to be deducted directly from your salary. Please note that bankruptcy may affect employment in certain circumstances and advice should be sought.

Need help?

To find out more, call 0330 024 0888 or email

Lee Green


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Larking Gowen

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