Tribunal Intelligence · Yerty Findings
When your employer goes insolvent, who pays?
Often, the state does. When an employer becomes insolvent, the Secretary of State stands behind statutory payments through the National Insurance Fund — and is named as respondent in roughly 1 in 70 tribunal cases in this insolvency role. By case volume, that makes it one of the UK's most frequently named respondents.
Why the government keeps appearing as a respondent
When a company goes under, employees can claim unpaid statutory debts from the National Insurance Fund, paid on the Secretary of State's behalf by the Redundancy Payments Service (part of the Insolvency Service) under Part XII of the Employment Rights Act 1996. If that claim is refused or underpaid, the worker can bring a tribunal complaint against the Secretary of State, alongside their former employer. Multiply that by every contested insolvency payment and the state becomes one of the most-named respondents in the system.
What the state actually covers
These are capped statutory payments, not open-ended compensation: statutory redundancy pay, up to eight weeks' unpaid wages, up to six weeks' holiday pay, statutory notice pay and any basic award — each subject to the statutory cap on a week's pay (£751 from April 2026). That ceiling is exactly why the awards cluster low.
| Measure | Value |
|---|---|
| Insolvency-role cases (2017–2026) | 1,855 |
| Cases that won a claim | 499 |
| Cases with an extracted award | 377 |
| Awards against the SoS (visible floor) | £6.84m |
| Median award | £5,010 |
| Largest single award | £561,113 |
The median is the tell
Across the cases where we can read an award, the median is £5,010 and the visible total is at least £6.84m. That low midpoint is the signature of capped statutory payments — redundancy, notice, a few weeks' arrears and holiday — rather than the larger, open-ended awards seen in discrimination claims. The largest single award (£561,113) is an outlier, reflecting cases with many affected employees.
An insolvency wave, in the case counts
The volume tracks the economy. Insolvency-role cases rose from 36 in 2017 to around 300 a year across 2022–2025, in step with record UK company insolvencies. As businesses fail, more workers fall back on the National Insurance Fund, and more of those claims end up contested at tribunal.
Methodology & coverage
Based on Yerty's identification of the Secretary of State as a named respondent across published employment tribunal decisions (2017–2026), and extraction of awards where they can be read from the judgment. The £6.84m total is a visible floor, not the true total paid by the National Insurance Fund — most payments are made administratively by the Redundancy Payments Service and never reach a tribunal. The department title changes over the period (BEIS, then Business & Trade); the role is the same. These figures are not published in official Ministry of Justice statistics.
Frequently asked questions
Who pays redundancy if my employer is insolvent?
The state does, via the National Insurance Fund, administered by the Redundancy Payments Service (part of the Insolvency Service). You claim using form RP1, usually through the insolvency practitioner.
What can I claim from the National Insurance Fund?
Statutory redundancy pay, up to 8 weeks' unpaid wages, up to 6 weeks' holiday pay, statutory notice pay and any basic award — each subject to the statutory cap on a week's pay (£751 from April 2026).
Why is the Secretary of State a respondent at tribunal?
If the Redundancy Payments Service refuses a claim or pays less than you expected, you can bring a tribunal complaint against the Secretary of State (alongside your former employer). That dispute route is why the Secretary of State is named so often.
How much does the state pay out on insolvency claims?
In Yerty's data, readable awards against the Secretary of State in its insolvency role total at least £6.84m across 377 cases, with a median of £5,010 — reflecting capped statutory payments, not open-ended compensation.
Is this the same as suing the government?
No. The Secretary of State is named because it stands behind the statutory payments when an employer cannot pay, not because it was the employer. The department title changes over time (BIS, BEIS, then Business & Trade) but the role is the same.
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- Yerty Intelligence Hub — analysis of published employment tribunal decisions
- GOV.UK — Your rights if your employer is insolvent (Redundancy Payments Service)
- Employment Rights Act 1996, Part XII (legislation.gov.uk)
Related: award amounts · claims by sector
How to cite this
Yerty (2026). When your employer goes insolvent, who pays?. Yerty Intelligence Hub. https://yerty.co.uk/tribunal-data/employer-insolvency-secretary-of-state-tribunal (last updated June 2026).Free to cite for non-commercial use with attribution to Yerty. For commercial use, bulk or API access, or AI training, see our Data Use & Citation policy.
Figures derived from Employment Tribunal decisions published by HM Courts & Tribunals Service on GOV.UK, licensed under the Open Government Licence v3.0. Analysis © Yerty. Re-use is subject to our Data Use & Citation policy.
Yerty provides information, not legal advice. These figures describe the published tribunal record and are not a prediction for any individual claim. If your employer is insolvent, the Redundancy Payments Service and a qualified employment solicitor can advise on your specific entitlement.