The employees of an entity that is liquidated must also be dealt with, as is dealt with all the other processes.

The employees become creditors of the business that is liquidated. If the staff are not paid salaries or retrenchment packages immediately before liquidation, they become creditors (like all other creditors) against the insolvent estate.

SALARIES

Employees are entitled to be paid for any period they worked for the liquidated business and did not receive salaries.  Of course if the staff were paid their salaries up to the last date that they worked, they are not creditors and will not prove any claims against the insolvent estate.

RETRENCHMENT

The employees are entitled to a retrenchment package, but if the business did not pay this to them, this becomes a claim against the insolvent estate that the employee must claim from the liquidator.

The staff will be informed of who the liquidator is and they can put in a claim against the insolvent estate. Usually the staff do not get paid anything, unless there are assets that can be sold that deliver proceeds into the insolvent estate that make it possible for the liquidator to pay creditors.