Changes to How the Insolvency Service Calculates Holiday Pay Payments
15th November 2017Back to articles
The Insolvency Service Redundancy Payments Service (RPS) has the power to make various payments to employees, subject to various caps and qualifying criteria, if their employer becomes insolvent owing them money.
Payments the RPS can make include:
up to six weeks' holiday pay;
statutory notice pay;
up to eight weeks' arrears of unpaid wages, including a payment for a protective award if the employer has failed to comply with the collective consultation rules;
unpaid pension contributions; and
a basic award for unfair dismissal.
Following recent decisions by the Employment Appeal Tribunal on what should count as 'normal remuneration' for the purposes of calculating employees' holiday pay, the Insolvency Service has updated its guidance on the calculation of holiday pay payments due to employees when their employer becomes insolvent.
For further information, see https://www.gov.uk/government/news/employment-appeal-tribunal-changes-to-how-the-insolvency-service-calculates-holiday-pay-payments.