Insolvency and Termination of Contracts of Employment

Posted in : Supplementary Articles NI on 29 September 2010 Issues covered:

This article sets out the law in relation to the various forms of insolvency and the impact they might have on employment status.


In an insolvency situation, much confusion surrounds the continuing employment of the Company’s employees. Whether their jobs will be affected by the Company’s insolvency depends on the type of insolvency process.
In basic terms, a company is insolvent if it cannot pay its debts as they fall due and/or its liabilities are greater than its assets.
There are several types of insolvency proceedings and the effect they have on the continuing employment of a Company’s employees is described briefly below:

1. Administration

The purpose of administration is to

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This article is correct at 06/08/2015

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.