12 December 2012
A new benefit introduced earlier this month (on 1 December 2012) will protect Islanders whose employer becomes insolvent. Insolvency Benefit provides employees with financial assistance if their employment ends on or after 1 December 2012 due to the insolvency of their employer.
The intention of the new benefit is to ensure that, where a formal insolvency procedure is underway, the former employees of insolvent businesses receive compensation based on a set proportion of any money owed to them by their former employer. This would include unpaid wages, holiday pay, statutory notice pay and statutory redundancy pay. The maximum amount payable in Insolvency Benefit is £10,000.
The Social Security Minister, Senator Francis Le Gresley, said “We want to give employees some financial security by providing a benefit based on a reasonable proportion of the amounts owed to them by their employer.
“Proposals for employee protection in insolvency situations were widely supported when we debated them in the Assembly. This new benefit provides a basic, minimum standard of protection for people whose employment has ended due to an employer’s insolvency.”
A temporary insolvency scheme, introduced by the Social Security Minister in 2009, which paid statutory notice pay to people whose employment ended due to their employer’s insolvency, closed on 30 November 2012.