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Redundancy/Insolvency 'Workable Solution'

Posted on 25 November 2015

R3 the trade body for the Insolvency Profession has criticised the government's response to its own call for evidence on consulting on redundancies in insolvencies for failing to provide a workable solution.

Current legislation where an employer proposes to make 20 or more employees redundant makes it obligatory to enter a period of consultation with the employees. These rules have proved difficult if not impossible for Insolvency Practitioners to implement due to the conflicting nature of the regulations and fast paced nature of insolvency procedures.

The overwhelming response from the insolvency profession was that reaching an agreement to avoid or reduce dismissals could often not happen in an insolvency situation as to do so potentially makes it more difficult to preserve the value of the business, to continue to trade and to retain key employees.

In light of responses from the profession the government plans to hold further discussions with interested parties.

If you have  questions regarding potential dismissal of employees as part of an insolvency procedure, speak to our Insolvency Practitioner in our Bristol office.   

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