Arrangement

A LAW to amend further the Social Security (Jersey) Law 1974

THE STATES, subject to the sanction of Her Most Excellent Majesty in Council, have adopted the following Law –

“12    Description of benefits

Benefit shall be of the following descriptions –

(a)     incapacity benefit, which shall consist of short term incapacity allowance, long term incapacity allowance and incapacity pension;

(b)     maternity benefit, which shall consist of maternity grant and maternity allowance;

(c)     adoptive parent grant;

(d)     survivor’s benefit, which shall consist of survivor’s allowance and survivor’s pension;

(e)     old age pension;

(f)      death grant;

(g)     insolvency benefit.”.

“(b)    the weekly rate of long term incapacity allowance shall be the percentage of the standard rate of benefit in which the degree of incapacitation, assessed in accordance with the provisions of Article 16, is expressed; and

(c)     the amount of insolvency benefit shall be calculated in accordance with Articles 26A to 26H.”.

“(1)    The contribution conditions for the several descriptions of benefit (other than insolvency benefit) shall be as set out in Schedule 2.”.

“26A Qualifying for insolvency benefit

(1)     A person qualifies under this Article if all of the following conditions are satisfied –

(a)     the person was in employment as, within the meaning of the Employment (Jersey) Law 2003[2], an employee of an employer;

(b)     the person was so employed wholly or mainly in Jersey;

(c)     the employer is bankrupt;

(d)     that bankruptcy is the principal reason for the fact that the person is no longer so employed;

(e)     the employer was liable to pay Class 1 contributions, in respect of the employee and the employment, in any one or more contribution months that fell within the period of 3 months that ended when the employer became bankrupt;

(f)      the employer has not paid the employee in full the amounts specified in Article 26C as they relate to that employee and that employment.

(2)     In this Article and Article 26C, ‘bankruptcy’ in relation to an employer includes any form of insolvency that results in an inability on the part of the employer to continue trading or to continue performing the employer’s activities, being insolvency that –

(a)     has occurred in Jersey or elsewhere; and

(b)     has resulted in the employer’s going into administration (however expressed), liquidation (however expressed) or receivership (however expressed) in Jersey or elsewhere or entering in Jersey or elsewhere into an arrangement (however expressed) with the employer’s creditors.

(3)     For the purposes of this Article, it does not matter whether an employer’s trading or activities took place in Jersey or elsewhere.

26B   Insolvency benefit and deductions

A person who qualifies under Article 26A shall be entitled to an insolvency benefit calculated by firstly adding the components referred to in Article 26C, secondly making the deductions (if any) specified in Articles 26F and 26G and finally applying the discounts (if any) under Article 26D.

26C   Components of insolvency benefit

(1)     A component of the insolvency benefit shall be any unpaid amount of wages (where ‘wages’ has the same meaning as in the Employment (Jersey) Law 2003) that relate to the person’s service in employment by the relevant employer during the 12 months that ended with the cessation of that service.

(2)     The components of the insolvency benefit shall also include any unpaid amounts that relate to the person’s employment by the relevant employer and are payable to the person (or would have been payable to the person except for the fact that the person was dismissed by virtue of the order of a court, being an order relating to the bankruptcy or winding up of the employer) as follows –

(a)     subject to Article 26E, an amount in lieu of a period of notice of termination of that employment, where the amount is in accordance with Part 6 of the Employment (Jersey) Law 2003;

(b)     an amount of redundancy payment in respect of that employment, where the amount is in accordance with Part 6A of the Employment (Jersey) Law 2003;

(c)     any amount (being an amount not already accounted for under paragraph (1)) owing in respect of a holiday actually taken by the person during the 12 months that ended with the cessation of the person’s service in that employment;

(d)     any amount (being an amount not already accounted for under paragraph (1) or sub-paragraph (c)) that –

(i)      accrued as holiday pay at any time during the 12 months that ended with the cessation of the person’s service in that employment, and

(ii)      under the person’s contract of employment –

(A)    had in those 12 months become payable to the person in respect of the period of a holiday, or

(B)     would in the ordinary course have become payable to the person in respect of the period of a holiday if the person’s service in that employment had continued until the person had become entitled to a holiday.

(3)     In adding the components relating to a person under this Article, if any one amount (or part of an amount) relates to more than one component it shall not be counted more than once towards the sum referred to in Article 26B.

(4)     Despite anything in this Article, a component shall not be counted towards the sum referred to in Article 26B to the extent (if any) that the Minister may prescribe by Order.

(5)     A reference in this Article to a holiday includes annual leave and leave (if not already included in annual leave) in respect of public holidays (including Christmas) and bank holidays.

(6)     For the purposes of paragraph (2)(a), Part 6 of the Employment (Jersey) Law 2003 shall be read as if any reference to notice in that Part were to the notice that would apply under that Part in the absence of any relevant agreement, as referred to in Article 56(7) of that Law, for a period of notice longer than those specified in paragraphs (1) and (2) of that Article.

(7)     For the purposes of paragraph (2)(b), Part 6A of the Employment (Jersey) Law 2003 shall be read as if Article 60D of that Law had no effect.

26D   Cap on insolvency benefit

(1)     An insolvency benefit payable to a person who qualifies under Article 26A cannot in aggregate exceed an amount of £10,000 in respect of any one employment of the person.

(2)     If the insolvency benefit payable to a person would (but for the operation of this paragraph) in aggregate exceed an amount applying under paragraph (1), the aggregate shall be discounted so that it equals that amount.

(3)     The discounting shall be applied in the following order –

(a)     first to the amount of the component referred to in Article 26C(2)(b);

(b)     then to the amount of the component referred to in Article 26C(2)(a);

(c)     then to the total of the amounts of the components referred to in Article 26C(2)(c) and (d);

(d)     then to the amount of the component referred to in Article 26C(1),

but only to such of the components (in that order), and to such extent, as is necessary to bring the aggregate down to the amount that applies under paragraph (1).

(4)     The Minister may by Order prescribe –

(a)     a different amount (or one or more different amounts in respect of more than one employment) for the purposes of paragraph (1); or

(b)     another order in which amounts are to be discounted under paragraph (3), or proportions in which those amounts are to be discounted, or both such an order and such proportions.

(5)     Anything so prescribed shall apply instead of what is specified in paragraph (1) or (3), as the case requires.

26E   Pay in lieu of notice: requirement to be looking for work

(1)     For an amount referred to in Article 26C(2)(a) in lieu of a period of notice of termination of a person’s employment to be treated as a component of insolvency benefit, the person must have been, in that period, available for, and actively seeking, remunerative work.

(2)     In this Article, except to the extent to which the States by Regulations otherwise prescribe for the purposes of this Article –

‘actively seeking’ in relation to a person and to work means doing all of the following –

(a)     taking all reasonable steps (including any appropriate training or work experience) to obtain suitable work;

(b)     not unreasonably turning down any offer of suitable work; and

(c)     attending every interview with an officer of the Department of Social Security to which the person has been invited unless the person has a reasonable excuse for not so attending;

‘available for’ in relation to a person and to work has the same meaning as under Article 3 of the Income Support (Jersey) Law 2007[3];

‘remunerative work’ has the same meaning as under Article 3 of the Income Support (Jersey) Law 2007.

26F   Pay in lieu of notice: deductions of certain amounts

(1)     The following amounts payable to a person in respect of the whole or any part of any period of notice to which the person is or has been entitled in respect of the termination of the person’s employment shall be deducted from the component referred to in Article 26C(2)(a) that relates to the person –

(a)     any wages that the person earns from employment that the person commences during that period (but not any wages that the person earns during that period from the continuation of any employment that –

(i)      the person started before the beginning of that period, and

(ii)      is employment that the person intended to engage in in addition to the employment that was terminated);

(b)     any benefit under this Law in the form of short-term incapacity allowance, as referred to in Article 15;

(c)     any benefit under this Law in the form of maternity allowance, as referred to in Article 22;

(d)     such part of any amount of invalid care allowance under the Invalid Care Allowance (Jersey) Law 1978[4] as would not have been payable but for the termination of the person’s employment;

(e)     such part of any amount of income support under the Income Support (Jersey) Law 2007 as would not have been payable but for the termination of the person’s employment;

(f)      such other amounts as the Minister may prescribe by Order.

(2)     The reference in paragraph (1)(a) to wages that the person earns from employment that the person commences during a period includes –

(a)     wages to which the person is entitled in respect of that employment during the period even if payment (in part or in whole) of those wages occurs after the end of the period; and

(b)     wages to which the person would have been entitled in respect of that employment during the period but for the fact that the person agreed to waive his or her entitlement to those wages or to postpone his or her entitlement to those wages until after the end of the period.

26G   Other deductions

(1)     If primary Class 1 contributions would have been payable in respect of any component specified in Article 26C if that component had been paid by the employer, their value shall be deducted from the component.

(2)     If income tax payable under the Income Tax (Jersey) Law 1961[5] would have been deductible or payable in respect of any component specified in Article 26C if that component had been paid by the employer, its value shall be deducted from the component.

(3)     Any amount owed by the employee to the employer in respect of leave that has been taken in excess of the employee’s entitlement, in respect of any overpayment of wages or in respect of any other matter shall be deducted from the sum of the components under Article 26C.

26H   Components cannot be negative

The value (after any deductions referred to in Articles 26F and 26G have been made) of a component referred to in Article 26C, or of the sum of the components referred to in Article 26C, cannot, for the purposes of any of Articles 26A to 26G, be less than zero.

26I    Subrogation

(1)     The Minister shall be entitled to be subrogated to the right of a person to recover any amount referred to in Article 26C(1) or (2), being so entitled to the extent to which the amount has counted towards an insolvency benefit paid to the person.

(2)     Nothing in paragraph (1) shall prevent the person from recovering any amount referred to in Article 26C(1) or (2) to the extent to which the amount has not counted towards an insolvency benefit paid to the person.

(3)     The operation of this Article shall not be affected by the death, or any incapacity, of the person.

(4)     In this Article and Article 26J –

‘count towards’ means have a net positive effect on the amount of an insolvency benefit after any requirement under Articles 26A to 26H to make a deduction, discount or other treatment has been complied with;

‘person’ means a person who is paid an insolvency benefit;

‘recover’ means recover from the relevant employer or from another person, and otherwise than as an insolvency benefit or as a component of an insolvency benefit.

26J    Repayment where employee recovers some amounts

(1)     A person who recovers any part of an amount referred to in Article 26C(1) or (2) shall repay the part so recovered to the Social Security Fund to the extent to which the part has counted towards an insolvency benefit paid to the person.

(2)     For the purposes of this Article, ‘part’ includes all and none.”.