Can Employees Claim Redundancy If Their Company Goes Bust?

When a company becomes insolvent and enters liquidation, employees often face uncertainty about their jobs, wages, and financial security. One of the most common questions is whether employees can claim redundancy pay if their employer goes bust. In the UK, employees may still be entitled to certain payments even if the company cannot afford to pay them directly. If a business enters liquidation, its operations usually stop and employees are typically made redundant. Redundancy occurs because the employer can no longer continue trading or provide work. When a company has insufficient funds to pay staff their full entitlements, employees may be able to claim some payments from the government through the Redundancy Payments Service (RPS). The RPS is part of the Insolvency Service and helps employees recover certain unpaid amounts when their employer becomes insolvent.

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