Terminations due to organisational bankruptcy

[pegasus70]

Hello am needing some advice as to how to proceed with this one....

Our company has just been told by our accountants that we are most likely going to have to declare bankruptcy within the next week.
We are a labour hire company, who also has a couple of workshops of our own and deal with the mining industry in WA. Our employees are employed under the Vehicle manufacturing, service and retail award 2010.

We have a new (not yet accepted) workers compensation claim which could complicate things.
We have a mix of casual and full time staff that we employ.

Can anyone tell me what processes we need to follow and when?

We obviously can't offer redundancies as we are going to have to claim bankruptcy... do we need to notify any agencies or anything like that?

Thank you

[Qld IR Consultant]

Pegasus, this issue to way beyond any advice you'll get in this forum. My one and only piece of advice would be to seek legal advice on how to successfully walk through this minefield.

[Moz]

I would have thought that a labour hire agency servicing the mining industry would be able to command a handsome profit margin. What went wrong?

[geoffcripps]

My word of advice , having been here a couple of times, is to be very careful.
Any payments made when there is a chance of bankruptcy can be reversed by the courts if they are not seen as transparent.
The Liquidator will tell you what to pay and to whom, and employees are unlikely to see any money for up to four months and often as long as more than a year, depending on the complexity of the liquidation and the ease of collecting funds.
Employees will be able to make a claim for some of their salary (depending on salary levels) if the company is wound up. In one case that I was associated with, the employees (me and another employee) had to formally file for liquidation to allow employees to commence action for part payment and to provide higher priority for superannuation entitlements after the owner did not have the funds to place the company into liquidation.
Employees should not sit on the job. They should accept the inevitable, unless there is a fast buyer indicated. If there is a fast buyer, then a guarantee for payment post liquidation, can be made to the liquidators.
If there are rumours already, then there is a distinct possibility that the company is already trading whist insolvent and therefore trading illegally.
My best advice to you is to ensure that if you have anything on your credit card, get it paid via accounts immediately. Even a company credit card that is due via expenses, this will become a personal debt to you.....read the agreement that you signed with the card provider!
In my case I was left with an employee airticket on my AMEX card as well as a month's accomodation to settle.
Good luck.