Bulb, another energy supplier went into administration earlier this week, but unlike the other companies before it, it has been placed into a Special Administration Regime by Ofgem, which means it can access Government support.
The Energy Act 2011 brought the Special Administration Regime (SAR) into law, but Bulb is the first energy supplier since the law was passed 10 years ago to be placed into a SAR.
The idea behind a SAR is that the Government will step in and fund the administration of an essential service, including when an energy company goes bust but is too big to have its customers passed over to another supplier.
This is a relief for Bulb’s customers, as they have certainty that for now, their tariff, supply and their credit balance will be maintained, but the future is not so certain for Bulb’s staff.
What’s Next For Bulb’s Staff?
Bulb is one of the top 10 largest energy companies here in the UK, with 1.7 million customers and 1,000 staff.
But what’s the future of the people currently working for Bulb?
It really does depend on what the administrators decide when they look at how viable the business is. It appears that the business has fallen into administration, not because it’s been badly run, but because it’s a victim of the price gap put in place by the Government.
When an energy firms goes bust, there are usually a few options:
- The business is taken over by another firm.
- Parts of the business are sold off.
- Customers are transferred to other suppliers.
- The business is wound up.
It’s not as clear what will happen to the staff. When parts of a business are sold off, the new owners may decide to take the staff with them, but there’s no guarantee. So what are your rights as an employee?
Redundancy Rights for Bulb Staff
If you, and at least 20 other employees are at risk of redundancy at one location, your employer has to follow certain procedures. This includes following the correct consultation processes and timescales, depending on how many people are being made redundant.
If these processes aren’t followed, your redundancy may automatically be unfair and you may be able to bring a claim to an Employment Tribunal.
Protective Award Claims
If the business you work for goes into administration and stops trading, there is still a legal requirement for your employer to follow the redundancy consultation requirements, and if they don’t, you could make a Protective Award Claim.
This is an award, paid for by the Insolvency Service, to employees who were not given the correct consultation process, as long as there were 20 or more staff at that location.
Unlike other employment law claims, there is no minimum length of service needed to make a Protective Award Claim and making a claim won’t affect you being paid any outstanding holiday pay, wages and redundancy pay, if you are eligible for this.
The amount of a Protective Award is based on your weekly wage when you lost your job, but there is a cap of 8 weeks’ pay at £544 per week, when the award is paid by the Insolvency Service, so your maximum award would be £4,352.