Q: If a business is closing down and I
am about to go on maternity leave do they still have to pay me as well as I
have two weeks’ vacation pending do they have to pay me for that as well?
A: You have to receive your salary/wages
as long as they can afford it. This all depends on how the business is closing
down and then the priority of debt payments. There are a few terms involved in
this process; i.e. insolvency (compulsory or voluntary), receivership, liquidation,
bankruptcy and administration. So it depends on the category which the company
falls under when closing down.
Winding-up
Salaries have secondary priority to the government
debts (taxes, NIS, etc.). According to the Companies Act 1995, as amended-s.435(1)(b):
all wages or salary (whether or not
earned wholly or in part by way of commission or for time or piece
work) of any employee, not being a director, in respect of services
rendered to the company during four months next before the relevant date;
Bankruptcy & Insolvency
If the company is bankrupt, wages have 4th
place priority according to The Bankruptcy and Insolvency Act, 2006 - s.127(d):
excluding
severance, claims for wages, salaries, commissions or compensation of any
employee for services rendered during the six months immediately preceding the bankruptcy,
together with disbursements properly incurred by a traveling salesman in and
about the bankrupt’s business, during the same period, so as not to exceed such
amount as may be prescribed by Order in each case;
The law is not explicit as to whether unused vacation
and maternity leave are included in debt payments, but it's a unique matter that I would love to put to the test.
