Government issues new guidance to support staff during insolvency

Blog Insolvency

The Government is to publish guidance for both employers and insolvency practitioners detailing how support can be provided to employees facing redundancy due to impending insolvency.

The guidance follows a call for evidence, launched in March 2015, which considered the feedback of a broad range of groups, including insolvency practitioners, trade unions and lawyers. These responses were published later the same year.

At present, if an employer is looking to make more than 20 members of staff redundant within a 90-day period, it has to enter into a consultation process. This is undertaken with the affected employees or the representatives they have chosen to speak for them and, dependent on the amount of redundancies proposed, must begin at least 30 days before any dismissals are made.

An employer is also expected to notify the Secretary of State in writing within the same timeframe.

The Government’s call for evidence found that in real insolvency situations, the legislation applying to collective redundancies was not always easy to implement due to the money available, the need to make fast decisions and attention being focused on saving the business.

The guidance will address this, with a range of non-legislative measures to aid employers and insolvency practitioners in their efforts to engage with affected staff in the face of large-scale redundancy. It will lay out the minimum expectations with regards to:

  • Notifying the Government prior to collective redundancy proposals
  • Complying with consultation requirements when rescuing or winding up a company
  • Providing information on ensuring compliance with the law when electing employee representatives.

The full outcome of the Government’s call for evidence can be found here.

Seeking insolvency advice at the earliest opportunity is the key to protecting your business and assets. Gibson Hewitt has a team of Licensed Insolvency Practitioners who can offer emergency debt advice and protect your interests. To find out more, contact Gibson Hewitt today.