Claiming redundancy from an insolvent company: Ask the expert

I worked for a company from Feb 2005-Oct 2009 for 18 and a half hours a week to qualify for family tax credit, with 10 days holiday a year and I never got paid for bank holidays. My working days were Tuesday 5 and a half hours, Weds and Thurs, full days at 7 hours each. The company officially went bust in March 2010 and the two other staff members also long term, are claiming redundancy. I am in the process of re-sending paperwork to claim from the insolvency for unpaid salary that I am still owed over the whole period due to miss calculations from my employer. Am I also able to claim back holiday money as I now find that legally I should have been entitled to more days off plus the bank hols although part-time? I started on £6.00 salary that went up to £7.00 a year later then to £8.00 in July 2009. I would really appreciate it if you could advice me as to what I should do next with regards my entitlements. Many thanks.

You worked for a company from February 2005 to October 2009 for 18.5 hours a week from Tuesday to Thursday. Although you received 10 days holiday each year you consider that you were entitled to more days off plus the bank holidays. You now wish to claim back holiday money owed. The company was placed into liquidation in March 2010.   When you initially starting working for your employers in February 2005 all employees were entitled to a minimum of 20 days holiday per year.

This was the position until 30 September 2007 for someone who worked five days a week. Bank and public holidays could be included in the minimum entitlement. There was, however, no statutory right to be paid bank and public holidays on top of that entitlement. As a part-time worker you would have been entitled to the same amount of holiday pro rata. As you worked two full days and 5.5 hours on the Tuesday you would have been entitled to at least 11 days holiday each year during this period.  From 1 October 2007 to 31 March 2009 an employee’s minimum holiday entitlement was increased to 24 days holiday per year. Again bank and public holidays could be included in the minimum entitlement. Your minimum entitlement would have increased to 13 days holiday each year.

From 1 April 2009 to October 2009 the minimum holiday entitlement was increased to 28 days which would have entitled you to a minimum of 15 days each year. As you were only receiving 10 days holiday before your employment terminated in March 2010 you were clearly not being provided with your full entitlement.  You are therefore able to claim for any unpaid holiday entitlement in the liquidation of the Company.

This is for the holiday entitlement set out in your contract of employment or by statute. If there were any provisions in your contract of employment which stated that any holiday not taken during a holiday year could not be carried over into the next holiday year such entitlement would be lost.  In order to make a claim you will need to complete a proof of debt form setting out the amount of unpaid holiday you are claiming. Your claim for unpaid holiday will be classed as a preferential claim. What this means is that you will receive payment in priority to the general body of creditors. However, the amount you receive will depend on whether there is any money available in the liquidation.

You are also entitled to make a claim from the National Insurance Fund (“NIF”) for any holiday pay entitlement for up to six weeks up to a maximum of £380 for each week. However, this is limited to holiday which has accrued during the 12 months prior to the date the company was placed into liquidation.  With this in mind you may also wish to look to the NIF at the same time as completing the proof of debt form referred to above as a claim on the NIF is likely to be dealt with quicker than a claim in the liquidation. If you were receiving less entitlement to holiday than your colleagues you could have a claim under the Part-time Worker (Prevention of Less Favourable Treatment) Regulations 2000. The difficulty is that such a claim must always be issued in an Employment Tribunal within three months of the company’s failure to pay you your entitlement.  Furthermore, even if you were within the deadline of issuing such a claim and you were successful such claims are again generally considered unsecured and you would need to submit a claim in the liquidation by submitting a proof of debt form.

Once again the amount you receive would depend on how much money is available in the liquidation. Further, your claim would need to be determined by the employment tribunal before the company enters liquidation otherwise usually you will need permission from the court to continue your claim. This claim is unlikely to be considered a preferential claim and as such payment will not be made in priority to other creditors. The chances of receiving payment is limited. In view of this I would focus on lodging your claim with the NIF and completing the proof of debt form to submit to the liquidators. I hope this assists with your difficult situation.

Alexa Etheridge is a senior assistant at Davenport Lyons.




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