Employment Rights Act 1996

Changes over time for: Section 183

Version Superseded: 31/12/2020

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Employment Rights Act 1996, Section 183 is up to date with all changes known to be in force on or before 14 November 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.

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183 Insolvency.E+W+S

(1)An employer has become insolvent for the purposes of this Part—

(a)where the employer is an individual, if (but only if) subsection (2) [F1or (4A)] is satisfied, F2. . .

(b)where the employer is a company, if (but only if) subsection (3) [F3or (4A)] is satisfied [F4, F5...

F4( c )where the employer is a limited liability partnership, if (but only if) subsection (4) [F6or (4A)] is satisfied.][F7; and

(d)where the employer is not any of the above, if (but only if) subsection (4A) is satisfied.]

(2)This subsection is satisfied in the case of an employer who is an individual—

(a)in England and Wales if—

[F8(ai)a moratorium period under a debt relief order applies in relation to him,]

(i)he has been [F9made] bankrupt or has made a composition or arrangement with his creditors, or

(ii)he has died and his estate falls to be administered in accordance with an order under section 421 of the M1Insolvency Act 1986, and

(b)in Scotland if—

(i)sequestration of his estate has been awarded or he has executed a trust deed for his creditors or has entered into a composition contract, or

(ii)he has died and a judicial factor appointed under section 11A of the M2Judicial Factors (Scotland) Act 1889 is required by that section to divide his insolvent estate among his creditors.

(3)This subsection is satisfied in the case of an employer which is a company—

(a)if a winding up order F10. . . has been made, or a resolution for voluntary winding up has been passed, with respect to the company,

[F11(aa)if the company is in administration for the purposes of the Insolvency Act 1986,]

(b)if a receiver or (in England and Wales only) a manager of the company’s undertaking has been duly appointed, or (in England and Wales only) possession has been taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the company comprised in or subject to the charge, or

(c)if a voluntary arrangement proposed in the case of the company for the purposes of Part I of the M3Insolvency Act 1986 has been approved under that Part of that Act.

[F12(4)This subsection is satisfied in the case of an employer which is a limited liability partnership—

(a)if a winding-up order, an administration order or a determination for a voluntary winding-up has been made with respect to the limited liability partnership,

(b)if a receiver or (in England and Wales only) a manager of the undertaking of the limited liability partnership has been duly appointed, or (in England and Wales only) possession has been taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the limited liability partnership comprised in or subject to the charge, or

(c)if a voluntary arrangement proposed in the case of the limited liability partnership for the purposes of Part I of the Insolvency Act 1986 has been approved under that Part of that Act.]

[F13(4A)This subsection is satisfied in the case of an employer if—

(a)a request has been made for the first opening of collective proceedings—

(i)based on the insolvency of the employer, as provided for under the laws, regulations and administrative provisions of a member State, and

(ii)involving the partial or total divestment of the employer’s assets and the appointment of a liquidator or a person performing a similar task, and

(b)the competent authority has—

(i)decided to open the proceedings, or

(ii)established that the employer’s undertaking or business has been definitively closed down and the available assets of the employer are insufficient to warrant the opening of the proceedings.

(4B)For the purposes of subsection (4A)—

(a)“liquidator or person performing a similar task” includes the official receiver or an administrator, trustee in bankruptcy, judicial factor, supervisor of a voluntary arrangement, or person performing a similar task,

(b)“competent authority” includes—

(i)a court,

(ii)a meeting of creditors,

(iii)a creditors’ committee,

(iv)the creditors by a decision procedure, and

(v)an authority of a member State empowered to open insolvency proceedings, to confirm the opening of such proceedings or to take decisions in the course of such proceedings.

(4C)An employee may apply under section 182 (employee’s rights on insolvency of employer) only if he or she worked or habitually worked in England, Wales or Scotland in that employment to which the application relates.]

[F14(5)In this section—

(a)references to a company are to be read as including references to a charitable incorporated organisation, and

(b)any reference to the Insolvency Act 1986 in relation to a company is to be read as including a reference to that Act as it applies to charitable incorporated organisations.]

Textual Amendments

F1Words in s. 183(1)(a) inserted (26.12.2017) by The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(3)(a)(i)

F2Word in s. 183(1) omitted (6.4.2001) by virtue of S.I. 2001/1090, reg. 5 Sch. 5 para. 19(2)

F3Words in s. 183(1)(b) inserted (26.12.2017) by The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(3)(a)(ii)

F4S. 183(1)(c) and word “and” immediately preceding it inserted (6.4.2001) by S.I. 2001/1090, reg. 5, Sch. 5 para. 19(1)(2)

F5Word in s. 183(1)(b) omitted (26.12.2017) by virtue of The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(3)(a)(ii)

F6Words in s. 183(1)(c) inserted (26.12.2017) by The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(3)(a)(iii)

F7S. 183(1)(d) and word inserted (26.12.2017) by The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(3)(a)(iv)

F8S. 183(2)(ai) inserted (24.2.2009 for certain purposes otherwise 6.4.2009) by Tribunals, Courts and Enforcement Act 2007 (c. 15), ss. 108(3), 148(5), Sch. 20 para. 17; S.I. 2009/382, art. 2(a)(b)

F9Word in s. 183(2)(a)(i) substituted (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 1 para. 18

F10Words in s. 183(3)(a) repealed (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248, 278, 279, Sch. 17 para. 49(3)(a), Sch. 26 (with s. 249(1)-(3)); S.I. 2003/2093, art. 2(1) (subject to arts. 5-8) (as amended by S.I. 2003/3340, art. 2)