Business Advice

Company insolvency- can the directors claim redundancy

Company insolvency involves many issues. If commercial recovery methods fail to help the company, it ends up in liquidation. One of the issues involved is employees’ redundancy. There are regulations as to who can and who cannot receive redundancy payments. The redundancy payments are usually made from the national insurance fund. For ordinary company employees this process is usually streamlined. However, the company directors have to satisfy certain requirements in order to access redundancy payments. The company directors do not quality if their duties only revolved around company policy or attended board meetings for a fee. However if a director held a job at the company and has proof that he or she was working under a contract of employment then he qualifies. Many small companies are run by owners who have specific roles to play alongside the other workers apart from the managerial duties. Therefore, if such a company becomes insolvent, such directors can claim insolvency.