Section 166 — Applications for payments.

(1) Where an employee claims that his employer is liable to pay to him an employer’s payment and either—

(a) that the employee has taken all reasonable steps, other than legal proceedings, to recover the payment from the employer and the employer has refused or failed to pay it, or has paid part of it and has refused or failed to pay the balance, or

(b) that the employer is insolvent and the whole or part of the payment remains unpaid,

the employee may apply to the Secretary of State for a payment under this section.

(2) In this Part “employer’s payment”, in relation to an employee, means—

(a) a redundancy payment which his employer is liable to pay to him under this Part, . . .

(aa) [F1 a payment which his employer is liable to make to him under an agreement to refrain from instituting or continuing proceedings for a contravention or alleged contravention of section 135 which has effect by virtue of section 203(2)(e) or (f), or]

(b) a payment which his employer is, under an agreement in respect of which an order is in force under section 157, liable to make to him on the termination of his contract of employment.

(3) In relation to any case where (in accordance with any provision of this Part) an [F2 employment tribunal] determines that an employer is liable to pay part (but not the whole) of a redundancy payment the reference in subsection (2)(a) to a redundancy payment is to the part of the redundancy payment.

(4) In subsection (1)(a) “legal proceedings”—

(a) does not include any proceedings before an [F2 employment tribunal], but

(b) includes any proceedings to enforce a decision or award of an [F2 employment tribunal].

(5) An employer is insolvent for the purposes of subsection (1)(b)—

(a) where the employer is an individual, if (but only if) subsection [F3 (6), (8ZA) or (8A)] is satisfied, . . .

(b) where the employer is a company, if (but only if) subsection [F4 (7), (8ZA) or (8A)] is satisfied [F5 , ...]

(c) [F5 where the employer is a limited liability partnership, if (but only if) subsection [F6 (8), (8ZA) or (8A)] is satisfied.][F7 ; and]

(d) [F7 where the employer is not any of the above, if (but only if) subsection [F8 (8ZA) or (8A)] is satisfied.]

(6) This subsection is satisfied in the case of an employer who is an individual—

(a) in England and Wales if—

(i) he has been [F9 made] bankrupt or has made a composition or arrangement with his creditors, or

(ii) he has died and his estate falls to be administered in accordance with an order under section 421 of the Insolvency Act 1986, and

(b) in Scotland if—

(i) sequestration of his estate has been awarded or he has executed a trust deed for his creditors or has entered into a composition contract, or

(ii) he has died and a judicial factor appointed under section 11A of the Judicial Factors (Scotland) Act 1889 is required by that section to divide his insolvent estate among his creditors.

(7) This subsection is satisfied in the case of an employer which is a company—

(a) if a winding up order . . . has been made, or a resolution for voluntary winding up has been passed, with respect to the company,

(aa) [F10 if the company is in administration for the purposes of the Insolvency Act 1986,]

(b) if a receiver or (in England and Wales only) a manager of the company’s undertaking has been duly appointed, or (in England and Wales only) possession has been taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the company comprised in or subject to the charge, or

(c) if a voluntary arrangement proposed in the case of the company for the purposes of Part I of the Insolvency Act 1986 has been approved under that Part of that Act.

(8) [F11 This subsection is satisfied in the case of an employer which is a limited liability partnership—]

(a) [F11 if a winding-up order, an administration order or a determination for a voluntary winding-up has been made with respect to the limited liability partnership,]

(b) [F11 if a receiver or (in England and Wales only) a manager of the undertaking of the limited liability partnership has been duly appointed, or (in England and Wales only) possession has been taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the limited liability partnership comprised in or subject to the charge, or]

(c) [F11 if a voluntary arrangement proposed in the case of the limited liability partnership for the purpose of Part I of the Insolvency Act 1986 has been approved under that Part of that Act.]

(8ZA) [F12 This subsection is satisfied in the case of an employer if—]

(a) [F12 the employer is a legal person,]

(b) [F12 a request has been made for the first opening of collective proceedings—]

(i) [F12 based on the insolvency of the employer, as provided for under the law of any part of the United Kingdom, and]

(ii) [F12 involving the partial or total divestment of the employer's assets and the appointment of a liquidator or a person performing a similar task, and]

(c) [F12 any of the following has decided to open the proceedings—]

(i) [F12 a court,]

(ii) [F12 a meeting of creditors, or]

(iii) [F12 the creditors by a decision procedure.]

(8A) [F13 This subsection is satisfied in the case of an employer if—]

(a) [F13 a request has been made for the first opening of collective proceedings—]

(i) [F13 based on the insolvency of the employer, as provided for under the laws, regulations and administrative provisions of a member State, and]

(ii) [F13 involving the partial or total divestment of the employer’s assets and the appointment of a liquidator or a person performing a similar task, and]

(b) [F13 the competent authority has—]

(i) [F13 decided to open the proceedings, or]

(ii) [F13 established that the employer’s undertaking or business has been definitively closed down and the available assets of the employer are insufficient to warrant the opening of the proceedings.]

(8B) [F13 For the purposes of [F14 this section]—]

(a) [F13 “liquidator or person performing a similar task” includes the official receiver or an administrator, trustee in bankruptcy, judicial factor, supervisor of a voluntary arrangement, or person performing a similar task,]

(b) [F13 “competent authority” includes—]

(i) [F13 a court,]

(ii) [F13 a meeting of creditors,]

(iii) [F13 a creditors’ committee,]

(iv) [F13 the creditors by a decision procedure, and]

(v) [F13 an authority of a member State empowered to open insolvency proceedings, to confirm the opening of such proceedings or to take decisions in the course of such proceedings.]

(8C) [F13 An employee may apply under this section only if he or she worked or habitually worked in Great Britain in that employment to which the application relates.]

(9) [F15 In this section—]

(a) [F15 references to a company are to be read as including references to a charitable incorporated organisation, and]

(b) [F15 any reference to the Insolvency Act 1986 in relation to a company is to be read as including a reference to that Act as it applies to charitable incorporated organisations.]

Amendment notes

1. F1 S. 166(2)(aa) inserted (1.10.1998) by 1998 c. 8, s. 11(2); S.I. 1998/1658, art. 2(2), Sch. 2 (with art. 3(5))
2. F2 Words in s. 166(3)(4)(a)(b) substituted (1.8.1998) by 1998 c. 8, s. 1(2)(a) (with s. 16(2)); S.I. 1998/1658, art. 2(1), Sch. 1
3. F3 Words in s. 166(5)(a) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 253(2)(a)(i) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
4. F4 Words in s. 166(5)(b) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 253(2)(a)(ii) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
5. F5 S. 166(5)(c) and word “and” immediately preceding it inserted (6.4.2001) by S.I. 2001/1090, reg. 5, Sch. 5 para. 18(1)(2)
6. F6 Words in s. 166(5)(c) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 253(2)(a)(iii) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
7. F7 S. 166(5)(d) and word inserted (26.12.2017) by The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(2)(a)(iv)
8. F8 Words in s. 166(5)(d) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 253(2)(a)(iv) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
9. F9 Word in s. 166(6)(a)(i) substituted (6.4.2016) by The Enterprise and Regulatory Reform Act 2013 (Consequential Amendments) (Bankruptcy) and the Small Business, Enterprise and Employment Act 2015 (Consequential Amendments) Regulations 2016 (S.I. 2016/481), reg. 1, Sch. 1 para. 18
10. F10 S. 166(7)(aa) inserted (15.9.2003) by Enterprise Act 2002 (c. 40), ss. 248, 278, Sch. 17 para. 49(2)(b) (with s. 249(1)-(3)); S.I. 2003/2093, art. 2(1) (subject to arts. 5-8) (as amended by S.I. 2003/3340, art. 2)
11. F11 S. 166(8) inserted (6.4.2001) by S.I. 2001/1090, reg. 5 Sch. 5, para. 18(1)(3)
12. F12 S. 166(8ZA) inserted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 253(2)(b) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
13. F13 S. 166(8A)-(8C) inserted (26.12.2017) by The Employment Rights Act 1996 and Pension Schemes Act 1993 (Amendment) Regulations 2017 (S.I. 2017/1205), regs. 1, 2(2)(b)
14. F14 Words in s. 166(8B) substituted (31.12.2020) by The Insolvency (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/146), reg. 1(3), Sch. para. 253(2)(c) (with regs. 4, 5); 2020 c. 1, Sch. 5 para. 1(1)
15. F15 S. 166(9) inserted (E.W.) (2.1.2013) by The Charitable Incorporated Organisations (Consequential Amendments) Order 2012 (S.I. 2012/3014), arts. 1, 3