Employment rights in insolvency: the legal framework

Establish status and the relevant facts

Identify the employer, employment relationship, service dates, contractual terms and actual working arrangements. A job title, shareholding or payroll entry alone does not settle employment status. Directors can require a separate evidence-based assessment.

Separate wages, holiday, redundancy, notice and other claims. Each has its own conditions and calculation basis. Record the appointment, any dismissal, any transfer and the periods to which sums relate.

Understand the different routes

A person may have a claim against the employer, a possible payment from the relevant government scheme and a tribunal claim. These routes interact but are not interchangeable. A government payment is subject to its own statutory scope and does not necessarily cover the whole employer liability.

Where the government pays an eligible debt, its recovery rights and the employee’s remaining claim need to be considered. Avoid counting the same paid entitlement twice in the creditor records.

Check dates and commencement

Employment law changes require attention to the date of the event and the commencement and transitional provisions. An Act’s Royal Assent date is not the date on which every section begins to apply.

Use current official guidance to identify tribunal time limits, any early conciliation requirement and the correct claim route. An insolvency process does not ordinarily justify waiting indefinitely to protect employment rights. This guide deliberately does not provide a universal claim deadline.

England and Wales: source route

England and Wales uses the Great Britain employment-rights and insolvency-payment framework. The Employment Rights Act 1996 remains central, as amended. The Employment Rights Act 2025 introduces phased changes: use Acas’s implementation record and the actual commencement provisions for the relevant event.