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Unfair Dismissals (Compensation)

Volume 978: debated on Wednesday 13 February 1980

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asked the Secretary of State for Employment if he will take steps so that employees who are unfairly dismissed should, in the event of the former employers going into liquidation, still obtain payments from the redundancy fund.

The basic element of an unfair dismissal award is payable under the Insolvency Provisions of the Employment Protection (Consolidation) Act 1978. The compensatory element is not so payable, but the employee has the right to claim in the insolvency as a creditor.

Since the basic award is calculated on the same lines as a redundancy payment under the Act, the employee is thus assured of equivalent treatment to those made redundant in the event of insolvency.

It is not proposed to amend the provisions. No new evidence has emerged since the legislation was passed in 1975 which would justify a change in practice.