Insolvency Service

3. Mr H complains that the Insolvency Service (IS) failed to provide him with the redundancy payments he is entitled to from the National Insurance Fund, as it incorrectly applied, misinterpreted, or relied on legislation that does not apply, specifically the Transfer of Undertakings Protection of Employment (TUPE) regulations.

4. As a result, Mr H says he has experienced financial and emotional distress and has lost time having to complain and follow the complaint process.

5. Mr H would like the IS to change its decision and make a payment to him of approximately £10,000. This is made up of sums he calculates he is owed for pay, bonuses, unpaid holiday and payment in lieu of notice. He would also like compensation for the distress caused and an apology.

6. The Insolvency Service’s purpose is to administer and investigate the affairs of bankrupt individuals and companies in compulsory liquidation.

7. TUPE are regulations which protect employees’ rights when a business or service changes owners, ensuring contracts and service continuity move to the new employer.

8. Mr H says the Ltd company who employed him was under supervision and appointed an insolvency practitioner at the end of August 2024. The successor company then offered Mr H new employment.

9. At the beginning of September, the successor company was incorporated, and appointed Mr H as director on the same date. He says the liquidator carried out an asset only transfer to the successor and no employees transferred to the new owners. He says there was also no transfer of the business, and the business proceeded to a credit voluntary liquidation.

10. In mid-September, the Ltd company dismissed Mr H from the company, and he began employment with the successor. At the end of November, the Ltd went into liquidation.

11. Mr H submitted a claim to the Redundancy Payments Service (RPS) in December 2024. RPS is part of the IS and provides payments owed to employees made redundant in certain circumstances. This comes from the National Insurance Fund.

12. RPS rejected Mr H’s claim in January 2025. It told him this was because ‘the business undertaking was transferred and the provisions of TUPE applied’.

13. Mr H says TUPE regulations do not apply in this case because an ‘asset only’ transfer took place rather than the undertaking being transferred. He says the liquidator formally appealed against RPS’ decision on this basis in March 2025 as the decision not to make a payment was wrong in law.

14. RPS rejected the appeal and told the liquidators it recommended Mr H went to an Employment Tribunal (Tribunal) with his dispute. He says he did not do this because ‘as TUPE does not apply it would be pointless’.

15. Mr H complained to the IS about this in May and received a response later that month. The IS maintained RPS’ view that TUPE applied and explained why it had reached this decision. The IS told Mr H that if he remained unhappy with its decision, he could take his claim to Tribunal.

16. Mr H escalated his complaint in June 2025 after receiving this response. Both parties maintained their positions on the matter and, once again, the IS highlighted Tribunal as being the place to challenge its decision.

19. The law (the PCA, 1967) says we cannot investigate a complaint if there is a legal route the complainant has (or had) the option to pursue, like a Tribunal or court, unless we consider it is (or was) not reasonable for them to do so. This ensures the Ombudsman does not interfere with matters which are in the remit of the courts.

20. GOV.UK explains that ‘If your application (for the money owed) is rejected…you can make a claim to the employment tribunal if you disagree with the decision. You’ll be claiming against the Secretary of State for Business and Trade and your former employer (‘the respondents’).’ That this is the appropriate course of action is detailed in the Employment Rights Act, 1996 sections 170 and 188.

21. We have discussed this with Mr H to understand the circumstances and the outcomes he wants. We do not consider whether legal action would succeed but whether it would be a reasonable option to look in to.

22. Mr H says that the IS did not provide the redundancy payments he is entitled to from the National Insurance Fund, as it wrongly interpreted TUPE regulations (particularly regulation 8).

23. For the decisions regarding Mr H’s redundancy entitlements that he says the IS did not correctly interpret the relevant legislation in his case, we can see this is something that the Tribunal process is intended to consider.

24. We can see Mr H initially told the IS that he thought there was no point referring the issue to Tribunal. Mr H has also since told us he applied to the Tribunal Service, who agreed that he could get extra time through an extension, and have set a hearing date in December 2026.

25. The IS has informed Mr H on several occasions in its responses on raising the issue of whether TUPE, and therefore access to monies via the RPS applies to his case or not, that Tribunal was the next appropriate course of action.

26. We can also see the crux of the complaint is that he thinks the legislation the IS has relied upon to reject his redundancy claim either does not apply, is incorrect, or has been wrongly interpreted (particularly TUPE regulation 8). The IS is clear that the legislation applies.

27. The above shows Mr H has a legal route open to him to achieve the outcomes he is seeking. We considered whether we should continue looking at the complaint regardless of this. We find it is reasonable for Mr H to pursue that route as only the Tribunal could give a view on the application of law and achieve the change of entitlement that he is looking for.

28. It is not appropriate for us to determine whether IS’ interpretation of the law is correct. This is better suited to the courts and is something we would expect Mr H to get legal advice about. A Tribunal is the correct place to determine this.

29. We can see no obvious barriers that might prevent Mr H from pursuing this route, as a court date has already been set. The courts cannot directly achieve the apology Mr H is seeking. However, he could achieve this as a by-product of taking legal action.

30. After carefully considering all the information, we have concluded that Mr H has a legal route through the Tribunal to achieve the outcomes he seeks and is the appropriate avenue to resolve his concerns. This is the only forum where decisions on entitlement to redundancy payments and the application of TUPE legislation can be made. Therefore, we will take no further action with this complaint.

31. While we understand our decision may be disappointing for Mr H, his concerns involve matters of legal entitlement and interpretation of employment law, so they are outside our remit to resolve. We believe the route through the Tribunal, which Mr H has now started, is the appropriate and most effective way forward.

32. We are sorry to hear of Mr H’s experience and appreciate the time and effort he has taken to share his concerns with us. While we cannot take any further action on this complaint, we hope our explanation has provided clarity and reassurance about the next steps available to him. We wish Mr H all the best with his Tribunal hearing and in resolving these issues.

1. We have carefully considered Mr H’s complaint about the Insolvency Service (IS). We are sorry to hear about the financial loss Mr H says he experienced and to learn of the reasons for his complaint. We recognise the impact of these events and how difficult this time has been for him.

2. After carefully considering Mr H’s concerns, we can see it is open to him to take legal action on the matter he has brought to us and that it would be reasonable for him to do so, based on the outcomes he is looking for. This means that we are not able to consider his complaint further. We have set out the reasons for our decision in this statement.