Employees' rights during insolvency

Abstract

Purpose

This paper aims to provide an examination of the position employees find themselves during corporate insolvencies. The paper examines employees' rights under insolvency procedures such as administration, company voluntary arrangements (CVA), administrative receivership, pre-packs and liquidation, to establish whether the rescue goal can be affected by employees' claims. Priorities in liquidation are also widely examined to establish the status of employees under this procedure and their entitlements.

Design/methodology/approach

Legal analysis.

Findings

The law offers more protection to employees than unsecured creditors. In comparison to unsecured creditors and even floating charge security holders, employment claims stand in a highly enviable position during insolvency.

Originality/value

The paper offers a wholesale assessment of the rights of employees during insolvency. There is a lacuna in research literature that addresses the issue of employment rights during insolvency.

Citation

Nyombi, C. (2013), "Employees' rights during insolvency", International Journal of Law and Management, Vol. 55 No. 6, pp. 417-428. https://doi.org/10.1108/IJLMA-08-2012-0026