I just found out my sister has been made redundant. She was the manager of a store in a chain that has been struggling for a while and liquidators were appointed a few weeks ago. They were told the shops would remain open for the foreseeable future however the liquidators called them in this morning to tell them they were closing certain stores, one of which is hers.

Now, my sister is an idiot and always has been. She’s known the company was in a bad way for a long time but made zero effort to try and find another job. Now she’s revealed why.

In her contract she’s has a 3 month notice period and she assumed that if the company went tits up she would get 3 months pay. I don’t think that’s correct in this situation and all she’s entitled to is her statuatory redundancy pay which amounts to £1400 instead of the £6k she was expecting.

Am I correct that in situations like this, your contract is irrelevant and all you get is the the statuatory entitlement?

Redundancy is on the basis of redundancy entitlement (stat min is £330 max for each year worked there) + your notice period.

Are you sure the company is being liquidated? It sounds rather more like administration. In which case, they join the queue in the ranks of creditors – indeed, I believe they will come after the creditors have been paid out.

She needs some advice. Pronto.

Are you sure the company is being liquidated

Sorry, it is in administration. They’re looking for a buyer for the remaining stores.

So based on what you said

Redundancy is on the basis of redundancy entitlement (stat min is £330 max for each year worked there) + your notice period.

She should be getting the redundancy pay & notice?

She should be getting the redundancy pay & notice?

She’s probably entitled to it. Whether there is the cash to pay it is another story, hence the fact that some employees are left out of pocket if made redundant by the administrator (because company funds are used to pay off the other creditors in priority).

Is staff pay not somewhere near (if not at the top) of list of priority – and surely 3 months notice counts as pay, not redundancy?

Staff do come near the top. I think the taxman gets first dibbs, then the administrator/ insolvancy practitioner, secured creditors (where the employees are grouped) then unsecured creditors eg suppliers.

Also the statutory amount is a maximum, not minimum, of £330 per week.

£350 a week from the first of Feb, for each full year of service