Wage shortfall, unpaid leave and notice pay: a former employee wins £18k after employer goes into liquidation
A former employee who was owed wages, holiday pay and notice pay has been awarded £18,318.14 after their employer entered voluntary liquidation and did not defend the claim.
1 min read · Last updated 19 May 2026
Case details
- #unauthorised-deduction
- #unpaid-annual-leave
- #wrongful-dismissal
- #shortfall-in-wages
- #notice-pay
Key facts
- The claimant was employed by the respondent for less than two years.
- The unfair dismissal complaint was struck out due to insufficient service.
- The respondent's liquidators stated they would not defend the claim.
- The claimant succeeded in claims for unauthorised deduction of wages, unpaid annual leave, and wrongful dismissal.
- The claimant was awarded £18,318.14 in total.
Timeline
-
Employment start
The claimant began employment with the respondent. Exact date not specified.
-
Letter detailing wage shortfall
A letter dated 31 March 2023 outlined the shortfall in wages.
-
First judgment on unfair dismissal
Employment Judge Johnson struck out the unfair dismissal complaint due to insufficient service.
-
Respondent's liquidators email tribunal
The respondent's liquidators emailed the tribunal stating they would not attend or defend the claim.
-
Final hearing and judgment
Employment Judge Tobin heard the case in chambers and awarded the claimant £18,318.14 for wage shortfall, unpaid annual leave, and notice pay.
The legal issue
Whether the claimant was entitled to compensation for unauthorised deduction of wages, unpaid annual leave, and wrongful dismissal, given that the respondent was in voluntary liquidation and did not defend the claim.
The outcome
The tribunal found in favour of the former employee on all three claims: unauthorised deduction of wages, unpaid annual leave, and wrongful dismissal. The respondent's liquidators had notified the tribunal they would not attend or defend the claim.
Compensation awarded:
- Shortfall in wages: £15,303.38
- Unpaid annual leave (18 days at £76.00 per day): £1,368.00
- Notice pay (1 month at £1,646.76): £1,646.76
- Total: £18,318.14
Lessons & takeaways
- Even if an employer goes into liquidation, you can still bring claims for unpaid wages, holiday pay and notice pay.
- Claims for unfair dismissal require at least two years' service, but other claims like unauthorised deductions and wrongful dismissal do not have that service requirement.
- If the employer does not defend the claim, the tribunal can still award compensation based on your evidence.
- Keep records of any letters or documents showing wage shortfalls – they can be key evidence.
- Interest may be added if the award is not paid within 14 days of the judgment being sent.
What this case shows
This case illustrates what can happen when an employer enters voluntary liquidation and leaves employees unpaid. The former employee had been employed for less than two years, which meant their unfair dismissal claim was struck out. However, they were able to pursue other claims that do not require a minimum length of service: unauthorised deduction of wages, unpaid annual leave, and wrongful dismissal (notice pay).
The respondent's liquidators told the tribunal they would not defend the claim, so the tribunal decided the case based on the claimant's evidence. The tribunal accepted a letter dated 31 March 2023 that detailed the wage shortfall, and awarded the full amount claimed.
What the losing side could have done differently
If the company had not gone into liquidation, it could have defended the claim by providing evidence that the deductions were authorised or that the claimant had received their correct pay. But by choosing not to participate, the company left the tribunal with no alternative but to accept the claimant's evidence.
Why this matters
For employees, this case is a reminder that even if your employer is insolvent, you can still bring claims for unpaid wages, holiday pay and notice pay. The two-year service requirement only applies to unfair dismissal – other claims have different rules. It also shows the importance of keeping documents that show what you are owed, such as letters or payslips.
For employers, the case underscores that ignoring tribunal proceedings does not make them go away. If you do not defend a claim, the tribunal can award the full amount claimed, plus interest.
Similar cases
Managing director dismissed by email: £25,000 for wrongful dismissal but protected disclosure claim fails
A managing director with a six-month notice period was dismissed by email after raising concerns about unpaid expenses and pension contributions. The tribunal awarded £25,000 for wrongful dismissal but rejected his protected disclosure claim.
Charity founder dismissed after blowing the whistle: a case of time limits and constructive dismissal
A general manager who resigned over a hostile working environment was later dismissed for gross misconduct. The tribunal found he was wrongfully dismissed but his whistleblowing claim failed because it was brought too late.
Healthcare assistant with 3 months' service wins wrongful dismissal claim for notice pay
A healthcare assistant who was dismissed without notice after just three months has been awarded £480 in notice pay. The tribunal rejected his other claims for automatic unfair dismissal, sex discrimination, and breach of contract.
Unfair dismissal and unpaid wages: newsagent employee awarded over £25,000
A former employee of Walkdens Newsagents Limited has been awarded £25,931 after the tribunal found they were unfairly and wrongfully dismissed, and that the employer made unauthorised deductions from wages and failed to pay holiday pay.