The Compendium

A Comprehensive Companion for All in the Insolvency and Restructuring Profession

Protective Award

A Protective Award is compensation awarded by an employment tribunal because an employer did not consult with the employee before they were made redundant.

The employee is only entitled to get this payment if they or their job role was included in a tribunal judgment.

If the former employer is insolvent, the Insolvency Service will pay the Protective Award. The amount of the award (payable to each affected employee) can be up to 90 days pay in cases of redundancy, or 13 weeks pay involving transfers of employment.

[See ‘Insolvency Service’ and ‘Redundancy’.]

Protocol IVA

The protocol is a voluntary agreement, which provides a standard framework for dealing with consumer Individual Voluntary Arrangements (IVAs). It applies to Insolvency Practitioners and creditors.

Where a protocol IVA is proposed and agreed, Insolvency Practitioners and creditors agree to follow the processes and agreed documentation.

The IVA protocol is a standard document that contains the following parts:

  • A set of general principles.
  • Standard terms and conditions for use in protocol compliant IVAs.
  • Legal and regulatory framework.
  • Template letter for consumers.
  • Template proposal and table of contributions.
  • Flowchart to explain the process for potential equity release.
  • Table of distributions.
  • Comparison table between bankruptcy and IVA expected outcomes.
  • Terms of Reference.

A protocol consumer IVA can last any length of time, however most IVAs will be proposed for 60 or 72 months.