ISOLAS LLP Secures Dismissal of Claim against the Employer’s Insolvency Fund
9 November 2026 | The Hon Neil F Costa
ISOLAS LLP Partner, the Hon Neil F Costa, successfully represented the Respondent, the Administrator of Gibraltar’s Employer’s Insolvency Fund (the ‘Fund’), in proceedings concerning an application for statutory redundancy pay out of the Fund.
Following a contested hearing on 5 November 2026, the Gibraltar Employment Tribunal dismissed the Claimant’s claim. Neil was assisted at the hearing by Isolas associate, Louise-Anne Turnock.
What was the dispute about?
The dispute arose after a Gibraltar company entered administration in October 2025.
In November 2025, the Claimant applied for redundancy pay out of the Fund whilst still employed by the company. The company’s Joint Administrators had informed him of potential payments that they opined may be payable to him by the Fund.
The Claimant’s employment subsequently terminated on 31 July 2026.
Although the Respondent accepted that the company was likely to be deemed insolvent under the Gibraltar Development Corporation (Employer’s Insolvency) Regulations, 1991 (the ‘Regulations’), Neil submitted that insolvency was not determinative. The Claimant still had to establish a substantive entitlement to the redundancy payment sought as at the date of his application.
What was the central legal question?
The proceedings concerned regulation 7(1)(c) of the Regulations. Subject to conditions and limits, regulation 7(1)(c) of the Regulations applies to: ‘…any employee whose contract has not been terminated…’ and confers entitlement to qualifying wages, bonuses, and holiday pay.
Regulation 7(1)(c)(iv) of the Regulations provides that ‘…where the contract was terminated by the employer’, a person is entitled to various qualifying unpaid termination-related payments, including redundancy pay. Neil submitted that those entitlements relate to compensation in circumstances where the employment contract has been terminated by the employer. Neil submitted that the Claimant had not established an accrued entitlement to statutory redundancy pay as at the date of his application because he remained employed.
How did Neil challenge the Claimant’s interpretation?
Neil accepted that regulation 7(1)(c)(iv)(dd) sits awkwardly within regulation 7(1)(c) because the former provision assumes a terminated contract whereas regulation 7(1)(c) refers to an employee whose contract has not been terminated. Notwithstanding this drafting oddity, Neil asserted that the determining point remains that, as a matter of employment law, an employee whose contract has not been terminated cannot be considered dismissed as redundant and entitled to redundancy pay.
Neil referred the Tribunal to the legislative history of the Regulations and explained that redundancy pay was added in 2001 to an existing group of termination-dependent entitlements.
The Claimant maintained that a letter to him from the Joint Administrators constituted notice of future termination and that this was sufficient to establish his entitlement to the redundancy payment sought from the Fund.
Whilst Neil disputed that the Claimant had received notice from the Joint Administrators, Neil distinguished notice of a future termination from the actual termination of employment. Even if notice had been given, the Claimant remained employed when he submitted his application and had not yet acquired an entitlement to redundancy pay.
What did the Tribunal decide?
The Tribunal dismissed the Claimant’s claim finding that the employment contract was still current when the application for statutory redundancy payment was made.
The decision highlights the importance of establishing that the statutory conditions for payment out of the Fund have been satisfied rather than relying solely upon an employer’s insolvency.
For further information, please contact ISOLAS LLP Partner, the Hon Neil F Costa.
