Part XII Insolvency of employers

184 Debts to which Part applies.

(1)

This Part applies to the following debts—

(a)

any arrears of pay in respect of one or more (but not more than eight) weeks,

(b)

any amount which the employer is liable to pay the employee for the period of notice required by section 86(1) or (2) or for any failure of the employer to give the period of notice required by section 86(1),

(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 appropriate date,

(d)

any basic award of compensation for unfair dismissal F1or so much of an award under a designated dismissal procedures agreement as does not exceed any basic award of compensation for unfair dismissal to which the employee would be entitled but for the agreement, and

(e)

any reasonable sum by way of reimbursement of the whole or part of any fee or premium paid by an apprentice or articled clerk.

(2)

For the purposes of subsection (1)(a) the following amounts shall be treated as arrears of pay—

(a)

a guarantee payment,

(b)

any payment for time off under Part VI of this Act or section 169 of the M1Trade Union and Labour Relations (Consolidation) Act 1992 (payment for time off for carrying out trade union duties etc.),

(c)

remuneration on suspension on medical grounds under section 64 of this Act and remuneration on suspension on maternity grounds under section 68 of this Act, and

(d)

remuneration under a protective award under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992.

(3)

In subsection (1)(c) “holiday pay”, in relation to an employee, means—

(a)

pay in respect of a holiday actually taken by the employee, or

(b)

any accrued holiday pay which, under the employee’s contract of employment, would in the ordinary course have become payable to him in respect of the period of a holiday if his employment with the employer had continued until he became entitled to a holiday.

(4)

A sum shall be taken to be reasonable for the purposes of subsection (1)(e) in a case where a trustee in bankruptcy, or (in Scotland) a F2trustee or interim trustee in the sequestration of an estate under the Bankruptcy (Scotland) Act 2016, or liquidator has been or is required to be appointed—

(a)

as respects England and Wales, if it is admitted to be reasonable by the trustee in bankruptcy or liquidator under section 348 of the M2Insolvency Act 1986 (effect of bankruptcy on apprenticeships etc.), whether as originally enacted or as applied to the winding up of a company by rules under section 411 of that Act, and

(b)

as respects Scotland, if it is accepted by the F3trustee or interim trustee or liquidator for the purposes of the sequestration or winding up.