Dismissed by a company in liquidation: unpaid wages and holiday pay claims succeed

When a company goes into liquidation

This case shows that employees can still bring tribunal claims even when their employer has entered voluntary liquidation. The former employee of Kirkby Blinds Direct Limited successfully argued that they were unfairly dismissed and that the company had unlawfully deducted wages, including holiday pay and underpayment of salary.

What the tribunal decided

The tribunal upheld all four complaints. However, because the employee had already received payments from the Redundancy Payment Office for unfair dismissal, notice pay, and holiday pay, the tribunal did not order additional compensation for those specific claims. Instead, it focused on the underpayment of salary and the employer's failure to provide a written statement of terms.

The company was ordered to pay £465.36 for the underpayment of salary and £1,032.00 for the breach of section 38 of the Employment Act 2002, which requires employers to give employees a written statement of their terms and conditions.

What this means for similar claims

This case highlights the importance of the Redundancy Payment Office as a safety net when an employer becomes insolvent. Employees should be aware that they can still obtain a tribunal judgment even if the employer cannot pay, and that the failure to provide a written statement of terms is a separate breach that carries its own penalty.

For employers, the case is a reminder that liquidation does not extinguish all employment law obligations. Even in financial difficulty, proper procedures must be followed, and basic requirements like providing written terms cannot be ignored.