If your employer becomes insolvent, you can usually still claim redundancy pay from the government.
“No TUPEStands for Transfer of Undertakings (Protection of Employment). If the business or work you are part of is sold or transferred to a new employer, TUPE means your existing terms and conditions transfer... transfer found; claimants' route to redundancyA dismissal that occurs when your employer no longer needs the work you do, either because the business is closing, a workplace is closing, or the requirement for employees to carry out that kind of w... pay is via the government's scheme.”
If your employer becomes insolvent, a new company started by the same directors doesn't automatically inherit your job or your claim, and you can usually still claim unpaid wages, notice pay, and redundancy pay from the government's Redundancy Payments Service.
- If your redundancy pay claim has been refused because a "TUPE transfer" is assumed, ask specifically what evidence supports that. A shared industry or a shared director isn't enough on its own.
- Keep a record of when you stopped doing any work, when you were told your role was at risk, and any P45 or termination correspondence, since dates matter to how these claims are assessed.
- If your claim is refused or disputed, get advice before accepting the decision, particularly where the "successor" company looks similar but does different work for different clients.
The situation
Two quantity surveyors worked for a construction company that carried out project work for large developers. When a payment dispute with one of its major clients caused serious financial trouble, the company told them their roles were at risk of redundancy, then had them leave over the following weeks as it moved towards liquidation. When they later applied to the government's Redundancy Payments Service for their redundancy pay, their claim was refused. The service believed a new company connected to the same directors had taken over the business under TUPE rules, which would make that company responsible for paying them instead of the government scheme.
What the tribunal found
The tribunal disagreed. It found no TUPE transfer had taken place. The new company did different work for different clients, took about a year to build up its own business, and did not employ anyone doing the claimants' old jobs. The fact that two directors and one other staff member later worked for the new company was explained by them working across several related companies, not by the business itself moving across. Regulation 3(1)(a) of the TUPE Regulations 2006 requires the "economic entity" to retain its identity after the move, and the tribunal found it plainly had not: "I did not consider there was any evidence that an economic entity... retained its identity and transferred."
Bailey and Lapkiewicz v Secretary of State for Business and Trade and Others. Case numbers 6025867/2025 and 6031275/2025. Employment Tribunal. June 2026.