What happens when an employer goes bankrupt?

When your employer goes bankrupt, it will naturally affect your employment. The most important thing to remember is that you must now deal with the appointed trustee.

The liquidator now takes over the management of the company and will make decisions on its behalf, no longer your former employer. Therefore, it is crucial to follow the trustee's decisions.

Usually, the trustee will send you a notice of termination if the company is scheduled to be wound up immediately. In some cases, however, operations may continue for a short period if it is financially favourable for the estate and creditors. This usually happens when the company has ongoing projects that can generate income for the estate.

It is important to note that the bankruptcy estate will take over your employment contract unless the trustee in bankruptcy sends you a notice of termination and a declaration that the bankruptcy estate will not enter into the employment contract within three weeks of the bankruptcy opening.