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What happens to employees in administration?

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What does company administration mean for employees?


Written by Jonathan Munnery

A company going into administration does not necessarily mean that the business will cease to exist; in fact, rescuing the company as a going concern is often the main objective. This means that employees do not necessarily lose their jobs once a company enters this type of insolvency process, as would be the case in liquidation.

Employment rights will be adopted by the administrator after 14 days, meaning this period is crucial for employees. Should the company subsequently be sold, employment contracts will be transferred over to the new company through a process known as TUPE. If, however, the company fails to find a buyer, or all attempts to otherwise save the business fail, the company could find itself entering liquidation, which would lead to redundancies.

If you are considering administration and are worried about how this will affect your employees, a licensed insolvency practitioner will be able to talk you through the whole process and explain what each option would mean for your staff.

Although nobody goes into business expecting their company to fail, UK Liquidators were supportive and helpful through the whole liquidation process, and I would have no hesitation recommending them to others in the same position.
Paul Winter
|
Director
Common Liquidation Questions
What is administration?

Administration is a formal insolvency procedure, which is often used to bring about the rescue of a business experiencing financial problems.

What is a pre-pack administration?

A pre-packaged – or pre-pack – administration process involves the sale of a company to either a connected or unconnected party.

Understanding the post-administration process

A company cannot remain in administration indefinitely, however, there is not one sole route out of administration.

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At UK Liquidators, our service is fully partner-led and your case will always be overseen by a fully licensed insolvency practitioner.

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