The process
Once an Insolvency Practitioner is appointed they will normally undertake an immediate review of the business and may either immediately or a few days following appointment consider it necessary to make people redundant. This could be all or part of the workforce.
How this is handled depends upon the Insolvency Practitioner and the particular circumstances of the business they have been appointed to manage.
Where timing permits, the Insolvency Practitioner may consult with the workforce about proposed redundancies. This timing is usually dependent upon what funding the business has to continue to trade.
In many cases a consultation process cannot be justified without asking employees to work for no pay whilst the process is undertaken. As a result the Insolvency Practitioner will review the required staffing levels and, with management, decide which members of staff are to be made redundant.
Once this has been determined the redundancies will be made. It is usually preferable from a Practitioner’s perspective to make all of the redundancies in one go rather than doing some on one day and then a few another. Usually the employees concerned will be made redundant with immediate effect but on occasions the employee may be given their notice and made redundant on a future date.
The announcement of the redundancies may be made on a group or individual basis. In the former case this may sometimes involve the reading out of names at the initial employee meeting or a specific meeting may be called for this purpose. In all cases the Insolvency Practitioner or their staff should explain how to claim amounts due.
