Carillion: Who pays employees when businesses go under?

In light of the business news over the last year, including the most current news of Carillion, it is important to know how business failure impacts on employment rights.

If an employer becomes insolvent, employees are able to make a claim for money that they are owed (much like a creditor). The difference? The money is paid to those employees by the government and not the company. Statutory notice pay, unpaid pension contributions and statutory redundancy are just some of the claims employees can make which will be (if successful) paid by the government. Each claim is capped at £489 per week and employees can claim for more than one issue (for example, statutory notice pay and unpaid pension contributions).

Employees can contact the Insolvency Service if they find themselves in such a situation.