If closure is a real possibility, staff need accurate information about their work and pay. The message must reflect what has actually been decided. Do not announce a liquidation that has not been agreed, and do not reassure people that wages or jobs are secure if the company cannot support that promise. Plan the conversation with an insolvency and employment adviser where time permits.

Establish what is known before you speak

Write down the present position: whether the company is still trading, whether payroll can be met, which roles may be affected, and when a decision is expected. Keep a clear distinction between a possible closure, a proposed redundancy and a confirmed termination. Decide who will answer employee questions and when the next update will be given.

If you cannot yet say whether wages will be paid on time, acknowledge the uncertainty and give a date for the next update. Do not ask staff to continue working on the basis of a payment assurance the company has no realistic means to honour. Take prompt advice on any immediate employment and trading decision.

Use clear language without promising an outcome

A first message might say, if it is true: “The company is reviewing its financial position with professional advisers. We have not yet made a final decision about closure or roles. We will update you by [date]. We will tell you separately if there is a change to your pay or work arrangements.”

If a decision has already been made, say so. Do not use the example above to imply that consultation or alternatives remain open when they do not. Explain who staff can contact privately about wages, leave or an urgent personal concern. Follow a spoken update with a short written record so the facts and next date are clear.

Check the consultation obligations

An insolvency risk does not remove employment responsibilities. Where 20 or more redundancies are proposed at one establishment within a 90-day period, collective consultation and notification rules apply. Smaller numbers also require careful individual handling. The timing, representatives, information and notices need employment advice in the circumstances of the case, especially where cash or a proposed appointment creates urgency.

Consultation should address the proposal and any realistic ways to avoid or reduce redundancies. It is not simply an announcement. Keep records of what was proposed, what staff were told, their questions and the board’s response.

Prepare pay and employment information now

Check each employee’s pay, start date, contracted hours, unused holiday, notice terms and any arrears. Reconcile payroll records with bank payments. This information helps advisers assess options and may later support employee claims. Keep it securely and make sure someone can access it if the company ceases trading.

If the employer enters formal insolvency and cannot pay statutory entitlements, eligible employees may be able to claim certain amounts through the Redundancy Payments Service. The insolvency practitioner supplies a case reference number for an application. The availability and amount of any payment depend on eligibility and the particular claim; avoid telling staff that the government will automatically pay everything they are owed.

Our Employees and Redundancy page explains the main issues in more detail. A director’s own potential redundancy claim is a separate question and should not be presented as part of the staff briefing.

Should we wait until liquidation is certain before telling staff?

The timing depends on what is proposed and what employees need to know about work and pay. Do not conceal a present inability to meet payroll behind vague reassurance. Get advice promptly on consultation and the next accurate update.

Can staff apply for redundancy pay as soon as closure is discussed?

Discussion of possible closure is not itself a formal insolvency or a redundancy. Claims through the Redundancy Payments Service have eligibility and process requirements, including a case reference after formal insolvency. Explain the current stage accurately.