The Redundancy Payments Service (RPS) provides help to employers who wish to make employees redundant but cannot afford to make statutory redundancy payments.
If an application for help is accepted, the RPS will make statutory redundancy payments to affected employees on an employer’s behalf.
Businesses can apply as long as they are not subject to formal insolvency proceedings; this includes businesses who:
- are still trading
- have stopped trading but have not gone formally insolvent
- will soon stop trading but are not going formally insolvent.
Payments made by the RPS are subject to statutory limits.
To be eligible, a business must provide evidence that it cannot afford to make redundancy payments owed, and the RPS must be satisfied that the affected employees are eligible for statutory redundancy pay.
Businesses can explore using this service by emailing the RPS at RPS.FA@insolvency.gov.uk and stating in the email:
- Whether the sender is the employer
- Whether the sender should be the main point of contact
- Business name
- Business address
- Number of redundancies.
The RPS will reply with further details on the minimum requirements for proving eligibility for the service.
Employers are responsible for settling all other outstanding payments owed such as:
- arrears of pay
- holiday pay owed
- notice pay
- lie week pay.
Please note that, if the RPS makes statutory redundancy payments on behalf of a solvent employer, the RPS will seek to recover the cost of the payments from the employer. If the employer fails to repay debt, enforcement action may be taken.
Further details on the Redundancy Payments Service can be found here.