Employment Rights Act 1996, section 184

Debts to which Part applies

Part XII Insolvency of employers

(1)This Part applies to the following debts—

(a)any arrears of pay in respect of one or more (but not more than eight) weeks,

(b)any amount which the employer is liable to pay the employee for the period of notice required by section 86(1) or (2) or for any failure of the employer to give the period of notice required by section 86(1),

(c)any holiday pay—

(i)in respect of a period or periods of holiday not exceeding six weeks in all, and

(ii)to which the employee became entitled during the twelve months ending with the appropriate date,

(d)any basic award of compensation for unfair dismissal[F916 or so much of an award under a designated dismissal procedures agreement as does not exceed any basic award of compensation for unfair dismissal to which the employee would be entitled but for the agreementF916] , and

(e)any reasonable sum by way of reimbursement of the whole or part of any fee or premium paid by an apprentice or articled clerk.

(2)For the purposes of subsection (1)(a) the following amounts shall be treated as arrears of pay—

(a)a guarantee payment,

(b)M46any payment for time off under Part VI of this Act or section 169 of the Trade Union and Labour Relations (Consolidation) Act 1992 (payment for time off for carrying out trade union duties etc.),

(c)remuneration on suspension on medical grounds under section 64 of this Act and remuneration on suspension on maternity grounds under section 68 of this Act, and

(d)remuneration under a protective award under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992.

(3) In subsection (1)(c) “holiday pay”, in relation to an employee, means—

(a)pay in respect of a holiday actually taken by the employee, or

(b)any accrued holiday pay which, under the employee’s contract of employment, would in the ordinary course have become payable to him in respect of the period of a holiday if his employment with the employer had continued until he became entitled to a holiday.

(4)A sum shall be taken to be reasonable for the purposes of subsection (1)(e) in a case where a trustee in bankruptcy, or (in Scotland) a [F917trustee or interim trustee in the sequestration of an estate under the Bankruptcy (Scotland) Act 2016F917] , or liquidator has been or is required to be appointed—

(a)M47as respects England and Wales, if it is admitted to be reasonable by the trustee in bankruptcy or liquidator under section 348 of the Insolvency Act 1986 (effect of bankruptcy on apprenticeships etc.), whether as originally enacted or as applied to the winding up of a company by rules under section 411 of that Act, and

(b)as respects Scotland, if it is accepted by the [F918trusteeF918] or interim trustee or liquidator for the purposes of the sequestration or winding up.

Definitions used in section 184 10

week

“week”—

(a)

in Chapter I of this Part means a week ending with Saturday, and

(b)

otherwise, except in sections 27C, 75F, 75H, 80A, 80B , 80EA , 80EF , 80J and 86 and paragraph 11 of Schedule A1 , means, in relation to an employee whose remuneration is calculated weekly by a week ending with a day other than Saturday, a week ending with that other day and, in relation to any other employee, a week ending with Saturday.

Defined in s.235(1) · see it in the full Act
employer

(4) In this Act “employer”, in relation to an employee or a worker, means the person by whom the employee or worker is (or, where the employment has ceased, was) employed.

Defined in s.230(4) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act
employee

(1) In this Act “employee” means an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.

Defined in s.230(1) · see it in the full Act
the appropriate date

In this Part “the appropriate date”—

(a)in relation to arrears of pay (not being remuneration under a protective award made under section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992) and to holiday pay, means the date on which the employer became insolvent,

(b)in relation to a basic award of compensation for unfair dismissal and to remuneration under a protective award so made, means whichever is the latest of—

(i)the date on which the employer became insolvent,

(ii)the date of the termination of the employee’s employment, and

(iii)the date on which the award was made, and

(c)in relation to any other debt to which this Part applies, means whichever is the later of—

(i)the date on which the employer became insolvent, and

(ii)the date of the termination of the employee’s employment.

Defined in s.185 · see it in the full Act
basic award of compensation for unfair dismissal

“basic award of compensation for unfair dismissal” shall be construed in accordance with section 118,

Defined in s.235(1) · see it in the full Act
dismissal procedures agreement

“dismissal procedures agreement” means an agreement in writing with respect to procedures relating to dismissal made by or on behalf of one or more independent trade unions and one or more employers or employers’ associations,

Defined in s.235(1) · see it in the full Act
guarantee payment

“guarantee payment” has the meaning given by section 28,

Defined in s.235(1) · see it in the full Act
trade union

“trade union” has the meaning given by section 1 of the Trade Union and Labour Relations (Consolidation) Act 1992 ,

Defined in s.235(1) · see it in the full Act
contract of employment

(2) In this Act “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Defined in s.230(2) · see it in the full Act
employment

(5) In this Act “employment”—

(a)in relation to an employee, means (except for the purposes of section 171) employment under a contract of employment, and

(b)in relation to a worker, means employment under his contract;

Defined in s.230(5) · see it in the full Act

(6) This section has effect subject to sections 43K , 47B(3) and 49B(10) ; and for the purposes of Part XIII so far as relating to Part IVA or section 47B, “worker”, “worker’s contract” and, in relation to a worker, “employer”, “employment” and “employed” have the extended meaning given by section 43K.

Defined in s.230(6) · see it in the full Act

Cases considering section 184 11

Graysons Restaurants Ltd v Jones & Ors

[2019] EWCA Civ 725 · 17 April 2019Limits

Confirms that only debts falling within the categories in section 184 qualify for the guarantee, while an equal pay arrears claim can fall within paragraph (1)(a). (see paras [12]-[13]; [30]-[34]) Confirms that section 184(1) concerns debts, not damages, but that an equal pay claim for arrears may qualify as a debt under paragraph (a). (see paras [30]-[34]) Interprets arrears of pay broadly enough to include an unresolved equal pay entitlement accruing under an equality clause. The claim may therefore be a Part XII debt. (see paras [13]; [20]-[27]; [34]) The separately listed notice-pay category was considered when explaining the structure of section 184. It did not limit the meaning of arrears of pay in paragraph (a). (see paras [12]; [22]) The separate holiday-pay category was treated as a structural point relied on in Benson, but it did not determine whether equal pay arrears fell within paragraph (a). (see paras [12]; [22]-[24]) The basic-award category was noted as a separately specified protected debt, not as a definition limiting arrears of pay under paragraph (a). (see paras [12]; [22]) The reimbursement category was noted as a separately specified protected debt, not as a definition limiting arrears of pay under paragraph (a). (see paras [12]; [22]) The specified payments treated as arrears under subsection (2) did not exhaust paragraph (1)(a). The omission of equal pay from subsection (2) did not resolve the separate question under paragraph (1)(a). (see paras [13]; [22]-[25])

Mohammed Shazan Chaudhry v Paperchase Products Limited & Anor

[2025] EAT 181 · 10 December 2025Interprets

The court held that a basic award for unfair dismissal is one of the debts to which Part XII applies. That classification did not remove the separate temporal requirement tied to the making of an award. (see paras [65]-[70]) The court used remuneration under a protective award as a comparator. Although it is treated as arrears of pay, its appropriate-date rule follows the special regime applicable to awards. (see paras [66]-[68])

Secretary of State of Business Innovation & Skills v Dobrucki & Ors (Transfer of Undertakings: Insolvency)

[2015] UKEAT 0505_13_0302 · 3 February 2015

The court treated the debts listed in section 184 as the relevant category of state-guaranteed debts, subject to their having arisen before transfer. (see paras [16]; [18])

5 more judgments, and what each says about section 184, are in the case-law panel in the full Act.

Amendments and notes

7 notes from legislation.gov.uk

Amendments

  1. F916Words in s. 184(1)(d) inserted (1.8.1998) by 1998 c. 8, s. 12(4); S.I. 1998/1658, art. 2(1), Sch. 1
  2. F917Words in s. 184(4) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 16(2)(a)
  3. F918Word in s. 184(4)(b) substituted (30.11.2016) by The Bankruptcy (Scotland) Act 2016 (Consequential Provisions and Modifications) Order 2016 (S.I. 2016/1034), art. 1, Sch. 1 para. 16(2)(b)

Modifications

  1. C183S. 184(1)(d): power to modify conferred (1.8.1998) by 1992 c. 52, s. 212A(9) (as inserted (1.8.1998) by 1998 c. 8, s. 7; S.I. 1998/1658, art. 2(1), Sch. 1)
  2. C184S. 184(1)(d) modified (6.4.2004) by The ACAS Arbitration Scheme (Great Britain) Order 2004 (S.I. 2004/753), arts. 1(1), 7

Marginal citations

  1. M461992 c. 52.
  2. M471986 c. 45.