Changes to way Insolvency Service calculates holiday pay payments


The Employment Appeal Tribunal has made a decision which affects how the Insolvency Service’s redundancy payments service (RPS) calculates holiday pay payments

The tribunal decided that holiday pay should take into account commission if individuals were entitled to commission as part of their employment contract (called contractual commission).

The Insolvency Service advises that this decision affects everyone who has ever applied for and received holiday pay following an insolvency.

Individuals who have previously received holiday pay from the Insolvency Service may be eligible for an additional payment related to the contractual commission they were owed by past employer.

Those who applied for payment after 31 July 2011 do not need to do anything yet.

The Insolvency Service will soon be contacting this cohort directly about how to apply for an additional payment if they applied for and received holiday pay from August 2011 onwards and indicated on their application that they were entitled to contractual commission.

Anyone who meets these conditions and applied for payment before 1 August 2011 needs to contact the Insolvency Service directly. They will be required to supply their contract of employment with their employer at the time (or other evidence relating to that contract), plus evidence of the commission they usually earned or evidence of the commission they earned in the 12 weeks prior to the date of insolvency.

The Insolvency Service says anyone who would like it to check whether they are eligible for an additional payment should email or post their documents by 21 September 2017.