Mr Frew For the v Secretary of State for Business, Energy & Industrial Strategy — 2020

The claimant had previously obtained an Employment Tribunal award against Ultra Furniture Limited totalling £126,822.63, including unfair dismissal compensation, wrongful dismissal damages, unlawful deduction from wages and accrued holiday pay. Ultra Furniture Limited was insolvent, and the claimant applied to the National Insurance Fund for capped sums totalling £20,878.80. The Secretary of State refused payment on the basis that the claimant owed the company £34,174.35 under a director's loan agreement.

The issue was whether set-off should be applied directly against the capped National Insurance Fund claim, which would extinguish that claim, or first between the employer and employee to determine the debt owed by the insolvent employer. The Tribunal found that the correct approach was to set off the director's loan against the total debt owed by the employer to the claimant. That left the claimant still owed more than £92,000 by the employer.

Applying that approach, the Tribunal held that the claimant remained entitled to claim against the National Insurance Fund. The claim succeeded and the claimant was entitled to the sum claimed of £20,878.80.