For many Directors, this is the hardest part.
But your employees are better protected than you may think.
If the Company cannot pay wages, redundancy or notice, a Government fund steps in. Understanding how it works lets you give your team straight answers.
Know what your staff are owed before you speak to them.
4 THINGS EVERY DIRECTOR SHOULD UNDERSTAND
Where an insolvent Company cannot meet employee claims, statutory entitlements are met from a Government fund instead.
This is a legal safety net, not a discretionary payment.
Your team will not simply be left with nothing.
Unpaid wages, holiday pay, statutory notice pay and statutory redundancy pay can all be claimed.
Amounts are capped, and statutory redundancy pay specifically requires two years' continuous service.
We'll help you explain what each person is entitled to.
Consultation obligations, notification requirements and accurate employment records still apply, even when funds are short.
Getting these wrong can create separate claims against the Company.
Get the process right, not just the outcome.
Directors who are genuine employees, on the payroll and paid through PAYE, can often claim the same statutory entitlements.
Eligibility is assessed carefully, so the position needs checking properly.
Many Directors never realise this applies to them.
YOUR EMPLOYEES ARE NOT LEFT WITH NOTHING.
Understanding the process means you can give your team honest answers — and handle a difficult conversation properly.
That's understandable. Most Directors have never been through this before.
Your employees have statutory rights that do not disappear because the Company has run out of money.
What matters is that the process is handled properly and they are told the truth.
Don't tell staff nothing
Uncertainty spreads faster than bad news, and damages trust.
Don't promise payments you cannot make
Once funds run out, personal assurances become very difficult.
Don't dismiss staff informally
Process matters, and shortcuts can create additional claims.
Don't let employment records fall behind
Claims are settled from these records, so errors delay payment.
Don't assume you have no claim yourself
Many Directors qualify but never ask the question.
A confidential discussion today could help protect you tomorrow.
Tell us the basics and we'll call you back — free, confidential, no obligation.
THIS WEBSITE PROVIDES GENERAL INFORMATION AND DOES NOT CONSTITUTE LEGAL, EMPLOYMENT OR INSOLVENCY ADVICE. Your position depends on the individual circumstances of each Company and Director. You should obtain advice from an appropriately qualified professional, including a licensed insolvency practitioner where appropriate.
