Insolvency of the employer

This overview summarises the main issues that employment lawyers should be aware of in relation to an employer's insolvency.

When a company becomes insolvent, or is at risk of insolvency, the effect upon the company's employees will often be a key consideration. If the business is rescued as a going concern, then the hope will be that most, if not all, jobs will be saved. If the employees (or certain among them) are key to the business, they are also likely to be key to the success of any rescue, in which case it may be necessary to assure them at an early stage that their position will be safe to keep them from jumping ship. However, the need to get key employees on side early on will need to be balanced with the need to maintain confidentiality when negotiating a rescue. Care must also be taken not to misrepresent the situation.

If the business continues in some guise then it is likely that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) will apply to transferring employees. If there is no hope of a rescue deal,

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Employment News

Spain can’t use immunity to block translators bias case

Law360: Spain cannot rely on state immunity to overturn a translator's harassment and discrimination claim, the Court of Appeal has ruled, finding that the conduct complained of was not part of a governmental activity.

HMCTS announces delay in new ET practice directions implementation

HM Courts and Tribunals Service (HMCTS) has announced a delay in the implementation of new Practice Directions for Employment Tribunals (ET) in England, Wales, and Scotland. In an email circulated to national user group members, HMCTS advised that the Practice Directions, originally scheduled to coincide with the Employment Tribunal Procedure Rules 2025 on 6 January 2025, are now expected later in January 2025. The directions will introduce changes to the presentation of claims, responses, and statutory appeals, including restrictions on email submissions of ET3 response forms.

Lawyers warn skeletal zero-hours contract ban may backfire

Law360: A proposed reform to crack down on exploitative zero-hours contracts is so vaguely drafted that it is unworkable and risks backfiring on its aim to provide more stability for workers, lawyers and industry groups say.

ET Presidents explain how to approach existing Practice Directions and Presidential Guidance in light of new ET procedure rules

Employment analysis: Judge Barry Clarke, the President for the Employment Tribunals (England and Wales), and Judge Susan Walker, the President for the Employment Tribunals (Scotland), have published a joint letter, dated 18 December 2024, concerning the interaction between the current Practice Directions and Presidential Guidance documents and the new Employment Tribunal Rules 2024, which take effect on 6 January 2025.