NIM07082 - Class 1 NICs: Payments made under employment legislation: Insolvency of employer: What can be paid out of the National Insurance Fund

Section 184 Employment Rights Act 1996

As explained in NIM07081, the Secretary of State for Trade and Industry (“SofSforTI) can make certain payments out of the National Insurance Fund to an employee whose employer is insolvent. Under the above legislation, theSofSforTI can make the following types of payment out of the National Insurance Fund:

  • up to eight weeks arrears of pay
  • the amount the employer was liable to pay the employee for the statutory period of notice, or for the employer’s failure to give such notice
  • certain amounts of holiday pay
  • a basic award of compensation for unfair dismissal
  • reasonable reimbursement of any fee or premium paid by an apprentice or articled clerk.

For the purposes of the above legislation, the following amounts are treated as arrears of pay:

  • a guarantee payment (see NIM07005 - NIM07006)
  • any payment for time off from the employment under:
  • Part VI of the Employment Rights Act 1996. That Part deals with time off for specified purposes including, for instance, time off to carry out various public duties (ie, as a justice of the peace, a member of a statutory tribunal etc); or for looking after an ill relative.
  • section 169 of the Trade Union and Labour Relations (Consolidation) Act 1992. That section deals with payment for time off for carrying out trade union duties.
  • a medical suspension payment (see NIM07010 - NIM07011)
  • a maternity suspension payment (see NIM07015 - NIM07016)
  • a protective award (see NIM07050, NIM07051 and NIM07052).

For details of the limit on the amount that the SofSforTI can pay for any one week to an employee, see NIM07083.