Any business going into liquidation, no matter how large or small is bound to have consequences for staff and suppliers alike. Some 20,000 employees will be directly affected by the collapse of Carillion yesterday. The snowball effect on companies that supplied Carillion will ultimately result in more financial casualties. Any such companies are highly unlikely to receive any monies owed, potentially leaving huge cash flow problems. Subsequently, those persons employed by these suppliers may not even be aware of their possible fate yet. So sadly, there is a good chance that you may know someone directly or indirectly who will be affected.
The fallout of Carillion may not have any adverse effect on you or indeed your company, but are you fully conversant with the implications of going into liquidation?
No-one wants their company to fail. If you are ever faced with making your business insolvent, it’s essential to consider your employees circumstances as much as your own.
Upon appointment of a liquidator to wind up a business, every employee will be dismissed with immediate effect. If they so choose, they can file for wrongful dismissal. If the claim was found to be valid, any monies awarded would be classed as unsecured debts. Very little or none of the award payment may actually be made.
Outstanding wages to be paid?
Employees affected by a company entering into liquidation can claim wages owed via the appointed liquidator. Monies eligible to be paid include holiday pay, redundancy pay and payment due in lieu of a notice period, plus any wages.
Are Directors liable for the debts?
If you are a Director of a limited company, you have limited liability of the company debts. You would only be liable for company debts if it was found that you had committed fraudulent activities or engaged in wrongful trading.
Have you been affected by the fallout of Carillion and need advice on your entitlement? Are you an employee or employer facing the potential prospect of going into liquidation? Please do not hesitate to contact Clover HR in total confidence for advice and help during business changes.
Please call 0121 516 0299 or email firstname.lastname@example.org – as they say a problem shared is a problem halved!
We look forward to hearing from you…