Liquidation letter to employees: What to include

If your business is facing liquidation, it can be a worrying time. This is particularly true for employees, as the uncertainty can leave them feeling anxious and unclear about the future. They will also have lots of questions about what happens next. 

A well-written liquidation letter can help alleviate some of their concerns and provide answers to their questions. It also shows you care about them and are taking steps to achieve the best possible outcome for the business and everyone involved.

Here are some tips on what to include in a liquidation letter to employees. 

Explain the current situation

The letter should begin with a statement that shares the current situation. It should be easy to understand and transparent so everyone is on the same page. Employees have a right to know what’s going on, and being upfront and honest can help calm any concerns and prevent hearsay and misinformation.  

For example, you may wish to begin the letter with: “It is with regret we inform you that [company name] is entering liquidation. This means the business will be closing, and all operations will come to an end.”

Show empathy

Depending on their position within the company, this news may come as a surprise to many employees, so it’s important for an employer to show empathy. Staff may become emotional or fretful about their future, so take the time to show you understand their concerns and recognise their hard work.  

For example: “While we appreciate this news is difficult, we want to take a moment to thank you for your contributions to the company. We know you will have many questions and be concerned about how this will impact you, but we’re committed to supporting you through this process.”

Outline the next steps

One of the biggest questions employees will have is ‘what happens now?’ and the liquidation letter is a great way to answer that question and put employees’ minds at ease. Provide a clear outline of the next steps and what staff can expect in the coming weeks and months. 

This should include: 

• When can they expect to receive their final pay, including outstanding holiday pay
• Letting them know their rights to pay in lieu of notice and redundancy pay and how they can claim it if the company is unable to pay them directly
• Provide information about their company pension and what will happen to it 
• Detail any support the company will be offering on career guidance and make it known that references can be supplied. 

While you may not have all the answers at this point, sharing the next steps with staff can help make it a less worrying time and bring the team closer together. 

Tell them how they can get help

Employees will likely have a host of questions. Share where they can get support or how they can contact key people and services. This might include the contact details for: 

• The appointed liquidator 
• HR or management representatives
• Government support services, such as the Redundancy Payment Service or ACAS. 

Writing a liquidation letter isn’t easy, but it can be handled correctly if you show empathy, honesty and clarity. It can also help employees navigate through this worrying time and give them peace of mind that support is available to them. 

Are you looking for liquidation advice? 

If your business is facing financial difficulties or has already become insolvent, then get in touch with Bridge Newland as soon as possible. We offer expert advice on the next best steps. 

Our team understands that it’s a stressful time, but acting early can improve the options available to you and ensure you achieve the best possible outcome for your business.

Categorised in: Liquidation News