Insolvency professionals deal with labour-law questions at every stage of a corporate insolvency.
- Claims in CIRP: workmen and employees file claims individually (Form D) or through an authorised representative (Form E) under the CIRP Regulations. Each claim needs checking against wage registers, attendance, appointment letters, PF and ESIC records.
- Liquidation estate: sums due to a workman or employee from the provident fund, the pension fund and the gratuity fund do not form part of the liquidation estate (IBC s. 36(4)(b)(iii)). Courts have examined what this covers where the employer did not actually deposit the money, so check the latest decisions.
- Waterfall: workmen's dues for the 24 months before the liquidation commencement date rank equally with secured creditors (s. 53(1)(b)). Wages and unpaid dues of other employees for 12 months come next (s. 53(1)(c)).
- Statutory dues: EPFO (s. 7A, 14B, 7Q) and ESIC (s. 45A, 85B) assessments against the corporate debtor need review for period, rate and interest.
- During the process: wages and statutory contributions of employees retained during CIRP are part of the insolvency resolution process costs. Lay-off, retrenchment and closure follow the Industrial Relations Code, including notice, compensation and the re-skilling fund.
Labour Law Guru supports insolvency professionals with claim verification, computation of dues, records review and replies to the authorities.
Last reviewed 18-10-2026. General information, not legal advice for a specific case. Check the latest Act, Rules and notifications of the appropriate government before acting.