When a Debtor’s Debtor Pays Twice

    View Authors October 2013
    In the current climate, the demand for jobs substantially exceeds the supply. Even so, for employers it can still be difficult to find a quality employee who meets the specific requirements for the given job. Once a suitable employee is found for the vacant position, they complete the usual formalities – submitting documents on their education, health and evidence of criminal records, agree with the employer on wages and other conditions of the employment and sign the labor contract. The employee will then start work on an agreed date and fulfill their employment obligations, the employer pays their wages and the employment relationship is mutually satisfactory for both participants – until one day when an insolvency trustee calls. They inform the employer that the employee has been declared bankrupt and, as a result, the employer must pay a portion of the employee’s wage directly to the insolvency trustee as part of the enforcement of the decision.