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Dear insolvency
practitioner > Chapter 11 > Employment Protection Act - Redundancy
Payments
1. Handling ERA Claims through the Redundancy Payments Service (First published in Dear IP no. 42, September 1998, followed by a second publication in Dear IP no. 44, April 1999) Article Withdrawn December 2006 2. Dealing with Employment Protection Act Claims (First published in Dear IP no.19, November 1991) Article Withdrawn December 2006 3. EPA Claims: Informing Employees of Progress (First published in Dear IP no. 33, March 1995) Article Withdrawn December 2006 4. Company Rescue and Employment Contracts The purpose of this article is to provide guidance on issues arising from paras. 37 and 38 of Schedule B1 to the Insolvency Act 1986, where an administration order is made at a time when a company is in compulsory liquidation and the rights of employees are affected. Issue Paragraph 38 of Schedule B1 to the Insolvency Act 1986 allows for a liquidator to make an administration application in relation to a company which is in liquidation and if the court makes such an order, then it shall discharge the winding-up order in respect of the company. Similarly, paragraph 37 allows the holder of a qualifying floating charge to make an administration application if the company is subject to a winding-up order. The policy aim behind these provisions is to ensure that where a company is wound up and the liquidator (or the holder of a qualifying floating charge, under paragraph 37) considers that an administration would allow the company to be rescued or provide a better result for creditors, then an application can be made to court. This is part of the overall policy of promoting company rescue where companies that can be saved should be saved. One consequence of a winding-up order is that, unlike a voluntary winding-up, it automatically terminates the employees’ contracts of employment. This arises from the decision in Re Oriental Bank Corporation (1886) 32 ChD 366. This could obviously affect efforts to rescue a company if funds are needed to settle redundancy claims, which have to be taken away from the funds needed to pay for ongoing trading. The loss of continuity of service could also have implications for the ability of employees to exercise other employment rights. This guidance note is intended to assist practitioners in dealing with companies that have been wound up and then enter administration, and subsequently leave administration to continue trading, and considers the effects of decisions made regarding employment contracts. Recommendation Employment law, both as regards common law and the redundancy payments scheme is capable of delivering the desired outcome of the administration, provided insolvency practitioners are alert to the possible pitfalls and employees wish to co-operate. A winding-up order operates as a matter of law to dismiss employees unless, as a matter of contract, the liquidator waives the dismissal and the employees consent to that waiver. Similarly, where under the Employment Rights Act 1996 ("ERA") the contracts are renewed or the employees are re-engaged within the meanings given by that Act, there will be no dismissal. [Comment: there are two ways under employment law to avoid the effect of a winding-up order: at common law, the liquidator must waive the discharge of contracts and the employees agree; under ERA the contracts must be renewed or the employees re-engaged in accordance with section 138] Re-engagement is not likely to avoid redundancy claims in these cases as it would not be possible to make the offer at the relevant time as dismissal arises from the making of the winding-up order. Action to Take If an administrator wants to ensure that the employees’ continuity of employment is not interrupted by the making of a winding-up order and that redundancy claims do not arise which could hamper the company rescue, then certain steps should be taken. As stated above, a winding-up order automatically discharges all employment contracts in that company by operation of case law, Re Oriental Bank Corporation (1886) 32 ChD 366. However the court accepted in that case that where a company continues its business after the winding-up order in very much the same way as it did before that event, the liquidator would be competent to waive the discharge of contracts occasioned by the making of the order. As a matter of contract, the liquidator is entitled to treat the employees as never having been dismissed. But the liquidator must make it clear that the discharge is waived and the employees must consent to the waiver, either expressly or by conduct. The other alternative is that under section 138 of the ERA 1996, the liquidator can renew an employee’s contract of employment on exactly the same terms as the previous contract (within 4 weeks of the dismissal) and obtain the employee’s consent. Detail Under the ERA, a winding-up order is treated as an automatic termination of the employee’s contract of employment because it is an event affecting the employer which operates to terminate a contract of employment [s136(5)(b)ERA]. However section 138 ERA provides that in certain circumstances, an apparent dismissal may be deemed to be no dismissal if the employee’s contract is renewed or the employee is re-engaged under a new contract of employment. Subsection (1) of that section provides that an employee shall not be regarded as dismissed where i) his contract of employment is renewed, or he is re-engaged under a new contract of employment in pursuance of an offer (whether in writing or not) made before the end of his employment under the previous contract, and ii) the renewal or re-engagement takes effect either immediately on, or after an interval of not more than four weeks after, the end of that employment. Thus, in the case of renewal, the employer need not make an offer before the termination of the previous contract whereas in the case of re-engagement, if the employer wants to avoid liability for redundancy claims, he will have to make an offer of further employment before the original employment ended, ie before the winding-up order. Re-employment, ie renewal or re-engagement will mean that there is no dismissal and consequently no entitlement to a redundancy payment. As stated above, in cases of companies where there is a winding-up order, avoidance of redundancy claims would only be possible in cases where the employees’ contracts are renewed. Harvey’s (Industrial Relations and Employment Law, para. E [1523]) preferred definition of renewal is that it occurs where "the employer agrees to treat the employee in all respects as if he had not been dismissed". This is similar to the effect of a waiver of discharge as set out by the court in Re Oriental Bank Corporation. However, practitioners must bear in mind that the court still recognises that the employees have a right to treat a winding-up order as discharging their contracts of employment (ie as dismissal) regardless of the liquidator’s wishes, and could opt for the redundancy payment. ERA also affords employees the choice within the "trial period" to terminate the renewed contract and treat themselves as indeed dismissed [s138(2)(b)]. This applies where the terms and conditions of the contract as renewed, or of the new contract, differ (wholly or in part) from the previous terms of employment. With regards to continuity of employment, s214 ERA states that continuity is broken where, among other circumstances, a redundancy payment is made and the contract of employment is renewed or the employees are re-engaged. Harvey highlights this pitfall for employees choosing a redundancy payment because the payment will break continuity of employment for redundancy purposes. Re-employment will, for redundancy purposes, re-set the continuity clock to zero and if the employee stays on and is dismissed again for redundancy within the ensuing two years, the employee will receive no second redundancy payment. Where an administration application is considered the liquidator will need to explain carefully to employees the effect on the company’s future prospects of any decisions that they make with respect to their employment and any potential redundancy claims. General enquiries may be directed to Policy.unit@insolvency.gsi.gov.uk; Telephone 020 7291 6740 5.
Insolvency Rules 1986 Rule 4.90 – Crown Set-Off - Sums Paid to former
employees set off against a VAT Refund Insolvency practitioners should be
aware of the decision in Secretary of State for Trade and Industry v
Frid, [2004] UKHL 24, where the House of Lords considered the right
of Crown set-off in liquidations Rule 4.90 of the Insolvency Rules 1986 (IR’86)
governs the right of set-off between an insolvent company and its
creditors, and states that “(1) This rule applies where,
before the company goes into liquidation there have been mutual credits,
mutual debts or other mutual dealings between the company and any
creditor of the company proving or claiming to prove for a debt in the
liquidation. (2) An account shall be taken of
what is due from each party to the other in respect of the mutual
dealings, and the sums due from one party shall be set off against the
sums due from the other.” As a result of West End Networks Limited entering into
voluntary liquidation and being unable to provide for the compensatory
notice pay and redundancy payments, due to nine former employees under
sections 35 and 188 of the Employment Rights Act 1996 (ERA’96), the
Secretary of State (SoS) became liable under sections 166(1)(b) and
167(1) of that Act to pay all or part of them out of the National
Insurance Fund. Consequently, under this obligation, the Secretary of State
paid the employees £11,574.49 and by virtue of section 167(3) ERA’96,
all of the rights and remedies of the employees against the company thus
vested in her. The
company was due a VAT refund and HM Customs & Excise allocated their
VAT credit rateably between the three Crown claimants for outstanding
PAYE and National Insurance contributions and the Secretary of State for
the payments to the employees. The
Secretary of State received £2,344.03 as her share and accordingly
submitted a proof in the liquidation for £9,230.46 allowing for the sum
received in respect of the VAT credit.
The liquidator rejected the proof and the Secretary of State
appealed against the decision of the liquidator.
The Registrar was bound by an earlier decision of the Court of
Appeal and upheld the liquidator’s decision to reject the proof in the
lesser amount. A further
appeal by the Secretary of State to the High Court was rejected for the
same reason. Leave was
granted to the SoS to appeal to the House of Lords to consider the
principle. The issue to be considered was
whether, in determining the company’s claims against the Crown, or the
Crown’s right to prove in the liquidation, the VAT credit should have
been set off against the claim of the Secretary of State under section
167(3) ERA’96. The
question was thus whether the requirements of rule 4.90 IR’86 were
satisfied, with the liquidator of the company contending that there was
no debt owing under section 167(3) at the date of insolvency, that
there was only a possibility that such a debt would come into existence
afterwards. Lord Hoffman considered whether
rule 4.90 IR’86 had been complied with in the circumstances of
the case. There was no
doubt that the liability to repay VAT existed at the date of insolvency
but nothing was yet due under section 167(3) ERA’96.
Lord Hoffman stated that for the purpose of rule 4.90(2), it
was not necessary for the debt to be due and payable before the
insolvency date; that it was sufficient that there should have been an
obligation arising out of the terms of a contract or statute by which a
debt would become payable upon the occurrence of some future event(s). Lord Hoffman extended this
principle to cover a contingent liability arising out of statute,
stating that if a statutory origin does not prevent set-off in the case
of debts due and payable at the date of insolvency, he could see no
reason why it should make a difference that the statute creates a
contingent liability which exists at the insolvency date but only falls
due for payment and is paid afterwards.
In the case in point, the failure of the insolvent employer to
pay was the contingency which crystallised the liability imposed on the
Secretary of State by sections 166 and 167 ERA’96, whilst the payment
of those liabilities, in turn, was the contingency upon which the right
of subrogation depended. When
it became payable, it was a debt arising out of a statutory obligation
which existed before the date of insolvency and could thus be set
off. Lord Hoffman concluded that, in this
case, there was no difficulty in reconciling the Crown’s set-off with
segregation of the various funds, as the constitutional accountability
of the Crown to Parliament for expenditure of public money, means that
the Crown may have to deal differently with money from different
sources. All that happened
was that HM Customs & Excise wrote three cheques, to the Inland
Revenue, the DSS and for the Secretary of State, instead of just one
cheque to the company, thus preserving the proprieties of public
finance. The appeal by the Secretary of State
was allowed and, after providing for the set-off of £2,344.03, the
proof for the outstanding amount was accepted by the liquidator
accordingly. The Insolvency Service considers that the decision would also apply in bankruptcy cases. General enquiries may be directed to Policy.unit@insolvency.gsi.gov.uk; Telephone 020 7291 6740 6.
Guidance
booklet for employees/RP1 claim form. In January Redundancy Payment
Directorate (RPD) wrote to all insolvency practitioners about the
introduction of an updated booklet that replaced “Your rights if your
employer is insolvent (PL718)”. The
new booklet is called “Redundancy and Insolvency: A Guide for
Employees”, which includes a tear‑off RP1 claim form.
It aims to give claimants much clearer and more compact
information about making a claim to a Redundancy Payments Office and the
payments to which they are entitled.
RPD would be grateful if insolvency practitioners would ensure
that this new booklet is issued to all redundant employees rather than
the old PL718 booklet, the Redundancy Payments Charter and separate form
RP1. The new booklet can be
ordered in the normal way from the DTI Publications Order Line. The new booklet advises applicants to apply straight away for Jobseekers Allowance or other benefits they may be entitled to. RPD will deduct any such benefits from Compensatory Notice Pay, whether or not they are claimed, so please could you reinforce this message to redundant employees when you issue the booklet. General
enquiries may be directed to Redundancy.Payments@insolvency.gsi.gov.uk
7. Rights Of Action - Whether A Bankrupt May Make Claims To Employment
Tribunals – Are such claims property rights, thus vesting in trustee,
or personal rights? To draw
attention to the decision in Khan v Trident Safeguards Ltd and others,
[2004] EWCA Civ 624, where the Court of Appeal upheld an appeal by a
bankrupt former employee from an Employment Appeals Tribunal that had
decided, as a consequence of his bankruptcy, that the rights of action
vested in the trustee in bankruptcy, thus denying him the right to
appeal against an earlier decision of an Employment Tribunal which had
dismissed his complaints. The
definition of property in section 436 of the Insolvency
Act 1986 includes "things in action" but not all rights
of action will form part of the bankruptcy estate and vest in the
trustee. Some rights of
action, particularly those which are personal in nature, relating to
injuries to a bankrupt’s person or feelings and without reference to
his rights of property, will remain with the bankrupt because although
the rights are still property within the terms of section 436, as
clearly, they are things in action, they do not vest in the bankruptcy
estate because they are personal. It
is thus of importance to establish whether a right remains with a
bankrupt or forms part of the estate in bankruptcy and vests in the
trustee. Prior to
his bankruptcy Mr Khan had made applications to an employment tribunal
alleging racial discrimination and victimisation under the Race
Relations Act 1976 against his employer and four of its senior
employees. The Employment Tribunal dismissed all of the claims
unanimously and an order for costs against him was made in his absence. Later Mr
Khan was dismissed by his employer and he then claimed unfair dismissal
and victimisation under the Race Relations Act 1976, seeking
reinstatement. An
Employment Tribunal dismissed this application and he was ordered to pay
the company’s costs. Mr Khan filed a notice of appeal from the
decisions of the Employment Tribunals alleging that his former employer
had (1) racially discriminated against him; (2) victimised him; and/or
(3) unfairly dismissed him. Prior to
the hearing of the appeal the former employer served a statutory demand
on Mr Khan in respect of its employment tribunal costs, having
obtained judgment against him. In consequence, Mr Khan filed his
own bankruptcy petition and a bankruptcy order was made against him. As a
result of the making of the bankruptcy order, the Employment Appeals
Tribunal rejected Mr Khan’s appeals against the earlier tribunal
decisions stating that he did not have the status to prosecute any of
the appeals as that right now vested in the trustee in bankruptcy.
However, they did give him leave to appeal in all three cases. The Court
of Appeal considered whether Mr Khan had the right to bring the
actions in question, in spite of the bankruptcy order, because they were
matters where he was seeking personal relief without reference to his
rights of property. The Court
of Appeal confirmed its earlier decision in Grady v Prison Service
[2003] 3 All ER 745 [24], that a claim for unfair dismissal does not
vest in the trustee in bankruptcy where the employee is seeking
reinstatement because it is a claim directed at restoring the
contractual relationship between employer and employee and is thus a
personal claim. The unfair
dismissal claim was therefore referred back to the Employment Appeals
Tribunal to consider. As far as
the claims for racial discrimination and victimisation were concerned,
the Court considered whether those actions were hybrid (partly personal
and in part relating to property) as defined in the case of Ord v Upton,
[2000] 1 All ER 193, and thus partly vesting in the trustee, or whether
they were personal. Lady
Justice Arden stated that in principle, a claim for racial
discrimination was a hybrid one, seeking as it does a declaration as to
the rights of the parties (personal) and an order for compensation which
may not be limited to compensation for injury to feelings (property). However, in this case Mr Khan had amended his claim by
withdrawing or disclaiming any desire on his part to seek any remedy
incorporating recovery of pecuniary loss or property right, asking
instead for a declaration of discriminatory conduct and a claim for
injury to feelings. She
therefore felt that his claim was not hybrid and thus remained with him
rather than vesting in the trustee of the bankruptcy estate. Lord
Justice Buxton agreed with this reasoning although Lord Justice Wall
dissented. On a
majority, the Court of Appeal accordingly ruled that these matters
should be referred back to the Employment Appeals Tribunal for
consideration. The
position would therefore appear to be that depending on what relief or
remedy a bankrupt seeks in an action, the claim might be personal to him
or vest as part of the bankruptcy estate.
It is expected that this uncertainty will mainly appear in claims
arising in the field of employment law and related issues.
The Grady case left open the possibility that a fund formed from
a successful unfair dismissal claim may be claimed as an asset in the
bankruptcy. 8. Apportionment of Preferential Dividend between RPD and Employees - (forms RP11 & RP12)Following the repeal of Section 189 (4) of the Employments Rights Act 1996 with regard to insolvencies occurring on or after 15 September 2003, the Redundancy Payments Directorate (RPD) has equal preference with the employee- i.e. the RPD is no longer paid in priority to any other unsatisfied claims of employees. Details of this, together with examples, are included in the booklet ‘Redundancy and Insolvency- A guide for insolvency practitioners to employees’ rights on the insolvency of their employer (2005 - Eighth edition)’ which is on the Insolvency Service website www.insolvency.gov.uk . The examples in the booklet are based on a 50% dividend being declared. Please note that in respect of ‘wages’ the apportionment will apply also to instances where a 100% dividend is declared.
The change necessitates amending forms RP11 & RP12 and it is hoped the revised forms will be introduced by the end of this month. 9. Payment of cheques to the National Insurance Fund In The January 2005 the Redundancy Payments Directorate advised insolvency practitioners that from 1 April 2005 cheques should be made payable to the ‘National Insurance Fund’ and sent to the following address: Insolvency Service Finance Redundancy Payments Team 6th Floor East Ladywood House 45-46 St Stephenson Street Birmingham B2 4UZ It appears that in most cases cheques are still being forwarded to AMEY PLC. All insolvency practitioners are asked to ensure that all future payments are sent to the above address. It is intended that the employees’ payments will be handled by the Insolvency Service from July 2005. 10. Birmingham Redundancy Payments Office Although the Birmingham RPO has not physically moved premises the name of the building has changed. The address now is: Cobalt Square 83-85 Hagley Road Birmingham B16 8QG And insolvency practitioners should amend their records accordingly. 11. Payments to Employees – exchange of information The Redundancy Payments Offices (RPOs) have a target to pay 70% of employees’ claims within three weeks of receipt and 92% within six weeks, which has been met. A contributing factor to this is the good working relationship between the RPOs, Insolvency Practitioners and Official Receivers, which the Insolvency Service would like this to develop. One way could be for staff within an insolvency practitioner’s office to gain a greater understanding of the procedures in place to deal with employees’ claims in the RPO. To this end if an insolvency practitioner, or any appropriate staff, are interested in visiting a local RPO please contact the RPO manager who will be more than happy to arrange a convenient date. Equally some of the RPO staff believe that they would benefit from seeing things from the insolvency practitioner’s perspective, and the Insolvency Service would be grateful if insolvency practitioners could contact the local RPO manager if they are able to host such a visit. General enquiries may be directed to Redundancy.Payments@insolvency.gsi.gov.uk; Telephone 020 7291 6740 12. From 1 October 2005, there is an increase in the National Minimum wage The Government has recently responded to the
recommendations made in the Low Pay Commission's 2005 Report on the
National Minimum Wage. The Government have accepted.
The following is a link to the DTI employment relations
website http://www.dti.gov.uk/er/nmw/index.htm . General enquiries may be directed to Redundancy.Payments@insolvency.gsi.gov.uk; Telephone 020 7291 6740 13. Transfer of Undertakings (Protection of Employment) Regulations 2006('TUPE') (SI 2006/246)
These
new regulations implement EC Council Directive 2001/23/EC and come into
force on 6 April 2006. 14.
Increase in the National Minimum wage – S.I. 2006 No.2001 The minimum wage is a legal right that covers almost all
workers above compulsory school leaving age. There are different minimum
wage rates for different groups of workers as follows: ·
The main rate for workers aged 22 and over was set at £5.05
an hour. On 1 October 2006 this increased to £5.35 an hour. ·
The development rate for 18-21 year olds was set at £4.25 an
hour. On 1 October 2006 this increased to £4.45 an hour. ·
The development rate for 16-17 years olds was £3.00 an hour.
On 1 October 2006 this increased to £3.30 an hour. ·
On 1 October 2006 the rate of the accommodation offset
increased to £29.05 per week (£4.15 per day). The previous rate was
£27.30 per week (£3.90 per day). It is important to note that these new rates only apply to
pay reference periods beginning on or after the date they came into law.
The following is a link to the DTI employment relations
website http://www.dti.gov.uk/employment/pay/national-minimum-wage/index.html
Any enquiries regarding the above should be directed towards the
National Minimum Wage Helpline on 0845 6000 678. 15. The Employment Equality (Age)
Regulations 2006 - S.I. 2006 No.1031 The Employment Equality (Age)
Regulations 2006 came into force on 1 October 2006. For employees’ who
are dismissed on or after 1 October 2006 (that is the actual termination
date, not the projected date in cases where employees’ are dismissed
without notice) the following limits no longer apply ·
The upper age
limit of 65 ·
The taper at 64 For redundancies
made before 1 October 2006, the amount will be calculated as ·
For each complete year of continuous service between the ages
of 18 and 21, the redundant employee will receive half a week's pay. ·
For each complete year of continuous service between the ages
of 22 and 40, the redundant employee will receive one week's pay. ·
For each complete year of continuous service between the ages
of 41 and 65 the redundant employee will receive 1½ weeks' pay.
However, if the redundant employee is over 64, the total amount of the
payment received will be reduced. For redundancies made on or after 1 October 2006, the amount
will be calculated as ·
Up to the age of 21, the redundant employee will receive half
a week’s pay for each completed year of service. ·
22 - 40 years of age, the redundant employee will receive one
week’s pay for each completed year of service. ·
41+ years of age, the redundant employee will receive 1½
weeks' pay for each completed year of service. Further information about this
matter, including the updated ready reckoner, is available on the DTI
website on the following reference http://www.dti.gov.uk/employment/employment-legislation/employment-guidance/page15686.html
The Redundancy Payments
Directorate is currently updating the RP1 form and booklets to reflect
these changes but they are not expected to be ready for use until
November/ December. Any
enquiries regarding the above should be directed towards the
Redundancy Helpline on 0845 145 0004, or email Birmingham.rpo@berr.gsi.gov.uk
16. Offsetting
pensions against redundancy payments Under the Redundancy Payments Pensions Regulations
1965, employers may offset pensions or lump sums which are paid
immediately on redundancy or within a short time after and which satisfy
the qualifying conditions. According to the amount of the pension or
lump sum payable, the statutory redundancy payment due may be either
reduced or extinguished completely. Employers are not compelled to
offset pensions or lump sums in this way, or to apply the maximum
offset. Please note that pensions may not be
offset against statutory redundancy payments made to employees dismissed
on or after 1 October 2006 [The Employment Equality (Age)
Regulations 2006] Further information
about this is available on the DTI website on the following reference Any enquiries regarding this article should be directed towards the Redundancy Helpline on 0845 145 0004, or by email to Birmingham.rpo@berr.gsi.gov.uk 17.
Employees right to elect union representatives to receive information
from the administrator Insolvency
practitioners are reminded that employees of a company in
administration, where they are creditors of that company, may elect a
union or other workforce representative to receive information from the
administrator on their behalf. Such
representatives may also attend meetings on the employee’s behalf and
vote according to their wishes by way of proxy.
Any such election by the employee should be made in writing. General enquiries may be directed to Policy.unit@insolvency.gsi.gov.uk; Telephone 020 7291 6740 18.
Protective awards when a company is in liquidation In the case of Day v Haine
and another [2007] All ER (D) 298 (Oct), the court held that protective
awards made pursuant to section 189 of the Trade Union and Labour
Relations (Consolidation) Act 1992 were not debts provable in the
liquidation of a company in circumstances where they were made after the
date of liquidation. The Court of Appeal has now
set down a hearing date in this case for either 23 April 2008 or 24
April 2008. The Redundancy Payments
Directorate (RPD) will continue to submit a proof of debt in respect of
protective award payments. Insolvency practitioners are requested not to
formally reject the proof of debt (nor request a revision of proofs of
debt already submitted) pending the Court of Appeal’s judgment. If an insolvency practitioner feels unable to delay
making a decision and formally rejects the claim, the RPD will have to
appeal to the court against the decision and ask for the case to be
stayed until the outcome of the Court of Appeal case is known. This
could involve unnecessary legal and time costs. Any enquiries regarding this
article should be directed towards Barbara Roberts, Senior Policy Advisor, Area 5.8, 21 Bloomsbury St,
London WC1B 3QW. Telephone: 0207 637 6463, email: Barbara.Roberts@insolvency.gsi.gov.uk
General enquiries may be directed
to redundancy.payments@insolvency.gsi.gov.uk
Telephone: 0207 637 6477 19.
Payments made by the Redundancy Payments Directorate Payments
made to employees of insolvent employers are those that the employer
owes to the employees concerned. Once the payments are made the
Redundancy Payments Directorate (RPD) expects the payments to be
accepted in the insolvency. In the majority
of cases the information concerning the type of debt owed, and the
amount, is supplied by the insolvency practitioner on Form RP14a. As
such there should be no dispute about the payments being lodged in the
insolvency. If an insolvency practitioner has any doubt about an
employee’s claim the doubt should be brought to the RPD’s attention
before any payment is made. If after further consideration the RPD and
insolvency practitioner cannot agree on eligibility for payment the
claim to the RPD will be rejected on the basis that the insolvency
practitioner denies there is such an employer’s debt owed. The employee
will be advised of his/her right to refer the matter for determination
by an Employment Tribunal. In such instances the RPD may ask the
tribunal to request the appearance of the insolvency practitioner to
give evidence as to why the debt is disputed. Any enquiries regarding this
article should be directed towards Barbara Roberts, Senior Policy Advisor, Area 5.8, 21 Bloomsbury St,
London WC1B 3QW. Telephone: 0207 637 6463, email: Barbara.Roberts@insolvency.gsi.gov.uk
General enquiries may be directed
to redundancy.payments@insolvency.gsi.gov.uk
Telephone:
0207 637 6477 20.
Redundancy Payment Directorate Inspectors visits – wages and
eligibility checks Redundancy
Payment Directorate (RPD) Inspectors visit insolvency practitioner’s
offices to check wages and personnel records to validate claims made by
dismissed employees. As most of the visits are post payment of claims it
is possible that when an appointment is made by Inspectors the records
are already in storage. Where this is the case it would be helpful if
the records could be retrieved as soon as possible. In the event that
the records are not available when the Inspector is due to visit
insolvency practitioners are asked to inform the local Redundancy
Payments Office as soon as possible to avoid any wasted journeys. Any enquiries regarding this
article should be directed towards Barbara
Roberts, Senior Policy Advisor, Area 5.8, 21 Bloomsbury St, London WC1B
3QW. Telephone: 0207 637
6463, email: Barbara.Roberts@insolvency.gsi.gov.uk
General enquiries may be directed
to redundancy.payments@insolvency.gsi.gov.uk
Telephone: 0207 637 6477 There can be
instances where there are no wages and personnel records from which the
insolvency practitioner can complete a Form RP14a other than by taking
the information from the claimant’s RP1 Form.
In such cases the Form RP14a should be clearly noted to the
effect that the information is derived only from the RP1 Form and that
it has not been checked against the employer’s records. Any enquiries regarding this
article should be directed towards Barbara Roberts, Senior Policy Advisor, Area 5.8, 21 Bloomsbury St,
London WC1B 3QW. Telephone: 0207 637 6463, email: Barbara.Roberts@insolvency.gsi.gov.uk
General enquiries may be directed
to redundancy.payments@insolvency.gsi.gov.uk
Telephone: 0207 637 6477 22.
Miscellaneous employment issues IL1 - IP’s Redundancy and
Insolvency – ‘A guide for insolvency practitioners to employees’
rights on the insolvency of their employer’. The
IL1 has now been revised and will be available on the Insolvency Service
web site shortly. Annual
uprating of statutory limits The Department for Business Enterprise & Regulatory Reform (BERR) website gives full details of the current statutory limits in respect of redundancy payments. The website is updated when the limits change. The information can be accessed at the following address: http://www.berr.gov.uk/employment/employment-legislation/employment-guidance/page19310.html The BERR contact for any queries concerning the limits and uprating is: Liz
Lowe, Senior Policy Advisor, Employment Relations Dispute Resolutions,
BERR, 1 Victoria Street, London SW1H 0ET. E-mail:
liz.lowe@berr.gsi.gov.uk New claims handling system - CHAMP (Claims Handling and Making Payments) As you may be aware the Redundancy Payments Directorate (RPD) is moving towards a new claims handling system known as CHAMP. A working group made up of RPD staff has had numerous meetings to try to ensure that the system meets the requirements not only of the RPD but also that it will be fit for insolvency practitioner’s purposes. To that end a meeting was held in London and another in Leeds at which some insolvency practitioners were represented. This was very useful from both sides. If any insolvency practitioner wishes to participate in future workshops please could they email their contact details to: redundancy.payments@insolvency.gsi.gov.uk Claims
for unpaid pension contributions There
have been some instances of claims for unpaid pension contributions
including details of employee’s dependents. Insolvency practitioners
are asked to ensure that pension claims are only submitted in respect of
employees. Any enquiries regarding this
article should be directed towards Barbara Roberts, Senior Policy Advisor, Area 5.8, 21 Bloomsbury St,
London WC1B 3QW. Telephone: 0207 637 6463, email: Barbara.Roberts@insolvency.gsi.gov.uk
General enquiries may be directed
to redundancy.payments@insolvency.gsi.gov.uk
Telephone: 0207 637 6477
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