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Redundancy payments service auditing update

As you may be aware, the Redundancy Payments Service are placing Employee/Director Redundancy Claims under greater scrutiny with the introduction of a higher level of auditing of claims. RCUK welcome an increase in the detailed inspection of claims to the RPS.  For a considerable period of time, we have been raising concerns with the RPS and the regulatory bodies that supervise this sector that certain organisations were submitting claims to the RPS when they were not authorised to do so. Lack of regulatory supervision and enforcement can only have a negative impact on the claims process within the RPS. It can also have a detrimental effect on directors who may not receive the correct advice or the benefit of support to receive the maximum funds that they are legitimately entitled and claims that are supported by the correct evidence.

We know that many directors wish to close their business in a compliant manner but rely on payments from the RPS to meet their liquidation costs, so it is crucial that they receive the correct guidance and support. We hope that the RPS’ newly introduced questionnaire will help to improve standards across the whole sector.

Questionnaire

The RPS have introduced a questionnaire in relation to directors redundancy claims that contains 45 questions/requests for information/documentation. The questionnaire is designed for directors and regulated claims management companies that assist directors to make claims to the RPS. It sets out the parameters that the RP intend to use to audit claimants. We appreciate that some IPs have already been responding to the RPS queries and providing additional information that is now incorporated into the questionnaire.

We are pleased to report that answers to many of the questions asked, and documents requested are already supplied to the RPS by RCUK on behalf of the client. Broadly speaking the questionnaire covers the following sections.

  • Employment Status including greater use of the Government Employment History document, from incorporation to liquidation
  • Has assistance been provided to make the claim and if so by whom?
  • Evidence of hours worked, and salary payments made including any reduction in payments
  • Differentials in employment responsibilities and director duties
  • Dates relating to taking advice on liquidation and redundancy and dates liquidation is actioned and employment terminated
  • Holiday and Sick pay arrangements
  • Detailed arrears of pay calculations and explanations.

As stated above our knowledge and experience as the market leader in directors redundancy claims means that we are well equipped to adapt to this increased scrutiny into the nature of the services we provide. At the start of our journey, we underwent a business-based audit by the RPS with a review of 80 of our cases and no issues were identified. We are confident that we have been able to adapt quickly and efficiently to the additional requirements implemented by the RPS. The questionnaire has been incorporated into our existing case management systems which in turn supports the IP and Director portals. This has been a relatively simple process for the business as the vast majority of information and documents were already collected by RCUK.  Our team have received additional training and support in relation to their communications with clients to ensure that we collate the information and documentation required in the very early stages of the claims process. As each claim is unique to its own circumstances there will be some additional manual input that will run alongside our case management systems, but the case managers and case manager assistants are knowledgeable and experienced and are well equipped to deal with these modifications.

Whilst we respect the authority of the RPS, our primary responsibility is to our clients. If we believe that the client has a legitimate claim that can be evidenced, then we will challenge RPS decisions where appropriate. We retain a respected and experienced employment law barrister, Tim Kenward, who ensures that we are fully updated, and the staff are trained in relation to any legislative changes (such as The Working Time (Coronavirus) (Amendment) Regulations 2020) and in precedents set out in case law.    

So, what do the changes mean for Insolvency Practitioners?  This process can only be beneficial for IPs.  Amongst other matters we will now be seeking employment history for all employees (where it is available) to cover all periods of employment. We will be providing detailed and full responses to the RPS from the outset. At present RCUK are receiving the full questionnaire even when some elements of the claims have been processed and accepted and the RPS has already received much of the requested information. We anticipate that these instances will reduce as the RPS will receive all the requested information from the outset. In terms of the benefit to the IP this should reduce the number of additional questions sent to them by the RPS . Although RCUK and you, the IP, have different roles to play in the director redundancy claims process we believe that if we act in a collaborative manner, our individual processes will become streamlined and more efficient. We are here to assist you in your role as liquidator and can share the burden and benefit of collating information.  We operate in an open and transparent manner and, where we can, we will share information and documents to avoid duplication. This will speed up the claims process and payment to the client which can in turn can allow them to settle their liquidation fees.  

If you have any questions about the real time changes RCUK have made to facilitate responding to the RPS questionnaire or  advice as to how RCUK can support you, the IP, please call our Directors, Andrew Read and Gary Addison on  01625 462587 or email them at [email protected]  or [email protected] 

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