We hope that this submission will be given due attention by the Portfolio Committee. There are a number of problems that workers face when a business is liquidated. Often employers do not inform workers of their financial plight timeously or at all. In fact, provisional liquidation applications are not even served upon workers or their unions. They often only get to know of the situation after the provisional liquidation order has been granted.
Workers therefore have no way of intervening to save the business.
This means that the employer and the provisional liquidator are not required to comply with section 189 of the LRA or section 41 of the BCEA . These are some of the examples in which current Insolvency Laws adversely affect workers. Recent amendments to the Insolvency Act 24 of 1936, introduced by the Judicial Matters Second Amendment Act 122 of 1998 have slightly improved the ranking of workers claim. The Judicial Matters Second Amendment Act inserts a new section 98A in the existing Insolvency Act of 1936. Section 2 of the inserted section 98A to the Insolvency Act will increase the extent of protection of workers claims in the event of insolvency.