It’s an unfortunate reality that many employees may find themselves facing an employer going under, often without warning.
Just before Christmas 2024, a local hotel shut its doors suddenly, leaving staff at a loss, unpaid, and anxious about payslips, taxes, and pensions. With no communication from the employer, this is a nightmare situation and highlights the importance of knowing your rights and the necessary steps to take.
Here are some steps you could take to protect yourself if you find yourself in a similar situation:
1. Claim What You’re Owed
If your employer enters administration or liquidation, you can claim financial support through the National Insurance Fund (NIF) by submitting an RP1 form. This covers unpaid wages (up to 8 weeks), holiday pay (up to 6 weeks), redundancy pay (based on age and service), and notice pay (1 week per full year worked, up to 12 weeks).
There’s a cap of £700 per week (if you are made redundant after 6 April 2025) or a cap of £643 (if you are made redundant before 6 April 2024), so act quickly to ensure you’re paid what you’re owed!
2. Check Your Taxes & Pension Contributions
One common issue in business closures is unpaid taxes and pension contributions.
Employers are legally obligated to pay these on your behalf, but if they haven’t, you’ll need to act quickly:
- Check your tax record: Log in to your personal tax account on the HMRC website to see if your PAYE has been submitted. If you notice any missing payments, report this to HMRC immediately.
- Contact your pension provider: Call your provider to confirm if contributions have been made. If they haven’t, you can report the issue to the Pensions Regulator, who may investigate further.
3. Know Your Rights
If your employer sells the business to another company, the Transfer of Undertakings (Protection of Employment) Regulations (TUPE) may apply. These regulations are designed to protect your pay, employment terms, and pensions during the transfer.
If your new employer breaches these rights—for example, by failing to pay you or reducing your terms and conditions—you may be able to bring a claim in an Employment Tribunal.
4. Don’t Go It Alone
Navigating the fallout of a business closure can feel overwhelming, but there are organisations and experts who can help:
- ACAS provides free advice on your employment rights.
- Unions can offer representation and guidance if you’re a member.
- Employment solicitors (like our team at Thrive Law) can help you understand your options, make claims, and secure what you’re entitled to.
5. Act Quickly
When it comes to claiming what you’re owed, time is of the essence. Tribunal claims, for example, typically need to be submitted within 3 months less one day of the issue arising. Acting quickly ensures you don’t miss out on your legal entitlements.
Please Remember, You’re Not Alone
We understand facing the uncertainty in these situations is incredibly tough, but there are steps you can take to protect yourself. At Thrive Law, we’re here to help employees navigate these challenges and ensure they know their rights.
If you are affected by a sudden business closure or have questions about your employment rights, reach out to our team for guidance. Together, we can help you navigate these challenges and ensure you know your rights.
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Disclaimer
Please note this blog is for reference purposes only and is only accurate at which the date it was published. It does not constitute legal advice and should not be relied upon as such. Specific Legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any actions. Please contact us if you have any questions on enquiries@thrivelaw.co.uk.
