Getting paid
This is understandably often the main concern of employees and it is important that employees understand the position clearly. It is vital that this is clarified and confirmed by the Insolvency Practitioner and the following points should be borne in mind:
Theoretically the business does not have to pay employees for a period of 14 days, at which point it is deemed that the contracts of employment have been adopted;
The employees at all times remain employees of the entity concerned and not the Insolvency Practitioner or their firm;
After the 14 day period or earlier if the Insolvency Practitioner ‘undertakes to pay the employees’ what is known as qualifying liabilities will be payable:
Wages and salaries from the date of the undertaking;
Holiday pay that has accrued since that date;
Contributions to an occupational pension scheme; and
Sick pay.
Even if an undertaking has been given the employee pay can only be made if there are funds to make the payment. Therefore employees should ask where these funds are coming from, for example, whether getting paid is dependent upon selling a certain level of goods.
If there are insufficient funds available at the time the payment is due then employee payments have priority over most other payments including the Insolvency Practitioner's fees.
Employees should ensure that the Insolvency Practitioner is aware of the normal payment dates and has the full bank details etc. to make the payment.
