If your employer goes bust, the government only guarantees statutory notice pay
“Employer ordered to pay £422.64 holiday payThe pay you receive for the paid annual leave you're entitled to under UK law, worth at least 5.6 weeks a year for most workers. It's usually calculated from your normal pay, though the exact method d... + £2,750 gross notice pay; guarantee limited to statutory minimum.”
If your employer becomes insolvent, you can still claim what you're already owed, including unpaid wages and holiday pay, but the government's guarantee on notice pay only covers the statutory minimum, not whatever extra your contract promises.
- Check your contract for your actual notice periodThe period of time either party must give before ending the employment relationship. Your contract will usually set a notice period, but the law also provides a minimum statutory notice period based o... today, not just the statutory minimum, so you know what's really guaranteed if your employer goes under.
- If your employer stops paying you or shows signs of financial trouble, start keeping a written record of exactly what you're owed and when.
- Get advice as early as possible if your employer becomes insolvent. An adviser can tell you what the government scheme covers and what you'll need to claim separately.
The situation
A general manager working in hospitality was less than a year into the job when his employer collapsed into insolvent liquidation and dismissed him without notice. His employer never paid him the holiday he'd built up, or the month's notice his contract entitled him to. Because his employer couldn't pay, the Secretary of State for Business and Trade was joined to the case as the statutory guarantor that steps in for certain debts when a company goes under.
What the tribunal found
The tribunal ordered his employer to pay him £422.64 in unpaid holiday pay and £2,750 gross in notice pay, a full month, well above the one week he was entitled to by statute under section 86 of the Employment Rights Act 1996The primary piece of legislation setting out employees rights in the UK, including the right not to be unfairly dismissed, the right to a written statement of employment particulars, and rights relati.... It also drew a sharp line around the Secretary of State's role. As guarantor under sections 182 and 184 of the same Act, the Secretary of State is liable only for the statutory minimum, not for the extra notice his contract promised him. That judgment stands against his employer alone.
Casey v Handmade Burger Company Ltd (in creditors' voluntary liquidation) and others, case number 1305702/2022, Birmingham Employment Tribunal, decided 27 March 2026 (amended 29 May 2026).