The States of Jersey published a White Paper on a proposed statutory insolvency payments scheme (the "Scheme") on 3 December 2009, with a closing date for consultation responses of Friday 5 February 2010.

The White Paper states:

"The proposed statutory insolvency payments scheme is intended to provide a basic minimum standard of employee protection and a measure of financial security for employees... The scheme will protect employees where their employment has ended due to their employer's insolvency and the employer is unable to pay money owed to employees... The paper explains what is meant by insolvency, it provides details of similar schemes in other jurisdictions, refers to research previously undertaken, explains the current temporary insolvency payments scheme (the "Temporary Scheme") and sets out the proposals for a statutory insolvency payments scheme."

The Scheme is based on the Temporary Scheme in place since March 2009 and appears practical and workable. Very much in summary, the Scheme will:

  • Entitle an individual to claim certain payments from the statutory insolvency fund if they meet five specific qualifying criteria;
  • Entitle an individual to claim a number of outstanding payments, including wages and
    holiday pay owed, statutory notice pay and statutory redundancy payments;
  • Cap payments from the statutory insolvency scheme at £10,000;
  • Be funded by increasing Class 1 employer Social Security contribution rates by a small
    fraction of a percent (i.e. 0.032%);
  • Be administered by the Social Security Department; and
  • Be subject to a right of appeal to the Social Security Tribunal.

Further information and the White Paper itself are available on the States of Jersey’s website.