Employment Act 1982

Insolvent employers: payments to employees

3 For subsection (2) of section 122 of the 1978 Act (definition of " relevant date " in relation to certain debts due from insolvent employers to their employees) there shall be substituted the following subsection—

“(2) In this section the ' relevant date', in relation to a debt, means whichever is the latest of—

(a) the date on which the employer became insolvent;

(b) the date of the termination of the employee's employment ; or

(c) where the debt falls within section 121(2)(d) or subsection (3)(d), the date on which the award was made.”.

4 (1) Section 122(3) of the 1978 Act (debts to which the provisions of section 122 about employees' rights on insolvency of employers apply) shall be amended as follows.

(2) For paragraph (a) there shall be substituted the following paragraph—

“(a) any arrears of pay in respect of one or more (but not more than eight) weeks ;”.

(3) For paragraph (c) there shall be substituted the following paragraph—

“(c) any holiday pay—

(i) in respect of a period or periods of holiday not exceeding six weeks in all; and

(ii) to which the employee became entitled during the twelve months ending with the relevant date ;”.

5 (1) Sections 122(11) and 123(9) of the 1978 Act (employee's rights on insolvency of employer and payment of unpaid contributions to occupational pension scheme) shall be amended as follows.

(2) In paragraph (a) for the words from the beginning to " was " there shall be substituted in each case the words " the application for a payment under this section has been ".

(3) In paragraph (c) for the word " further " there shall be substituted in each case the word " unreasonable ".