Business Advice
Effects of involving an insolvency practitioner to the employees
The aim of putting a business in administration is to save the company or at least save a part of it. This is of advantage to the creditors for it ensures that they get a better deal than in the case of a company winding up. If this happens, the employees’ do not lose their jobs. Sometimes, the financial situation might have deteriorated so much prompting the insolvency practitioner to close the company through business liquidation. In such a case, the employees are required to claim statutory redundancy payment from the national insurance fund. However such payments are usually minimal, therefore employees who have more debt in the company than they can claim through the national insurance fund are treated as preferential creditors. This means that the employees may not be able to recover all the money that the company owes them. Therefore, if you are an employee and the company you work for is being put in administration, it is best to prepare for the worst and consider seeking employment elsewhere.