Director's liability for redundancy pay in liquidation of company

G

Gervan

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I need to clarify whether a director of a company that has been transferred to a liquidator still has a liability for statutory redundancy payments to the employees, if there are insufficient funds for the company to pay them.
I think the employment has ceased with the company, and the liquidator or receiver would be the one signing to accept responisibility for the lump sum.
Is that correct?

The citizen's advice website reads:
 
Why would the director be liable? Is there a suggestion of reckless or fraudulent trading?
 
The liquidator assumes the rights of the director on appointment so I'd imagine it's the liquidator that signs on behalf of the company.

In normal circumstances The directors don't accept personal liability for the payment, they sign on behalf of the company which accepts its liability.

As @mandelbrot says the director being held personally liable is an entirely different matter.
 
No mandelbrot. No suggestion of that. It was just that line about the "employer" accepting liability that I had to check.
 
There are two issues here - one is where the Company cannot pay - lets assume for bona fide reasons - then the State scheme pays as per the Citizens Advice.
The other is where the company is solvent - even if liquidator appointed, the liability is still there.
 

I would have thought that insolvency was a given, considering the passage quoted in the OP.
 
I think its called a 'clarification' so that those less learned than yourself could instantly see that there are in effect two main types of liquidation, so they wouldn't pose another question for answering.
 
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