Insolvency arrangements for employees who live and operate in EU member states – awareness of ‘no deal’ arrangements
Hopefully insolvency is not something you have experienced and is not on the horizon for you. Nonetheless, it makes sense to be prepared for the worst.
When an employer becomes insolvent and is also unable to pay statutory redundancy pay, it is possible for those affected to claim statutory payments from the state instead. This is claimed from the EU member state the employee lives in.
If your organisation is UK based, it is worth being aware that your employees (of UK or EU nationalities) who live and operate in another EU member state, may no longer be entitled to receive payments (such as statutory redundancy pay) from the state that they operate in post-Brexit, if the UK leaves without a deal.
People living and working in the UK will continue to be protected as they previously were. This only affects employees of UK organisations, living and working in another member state and in the event of a no-deal exit.
This may mean that liability could lie solely with the employer. We would advise that any forecasting should take this possibility into account, especially if liability is not limited.
Further Brexit and HR Guidance
Visit our Brexit Business Preparation website page for more suggestions on how an organisation as a whole may identify the potential impact that Brexit could have on its operation; as well as get practical HR and employment legislation guidance on how businesses can get ready for Brexit.