(1) The winding up or insolvency of an employer's business shall cause the contract of employment of any employee to terminate one month from the date of winding up or the appointment of a receiver, unless the employment is otherwise terminated before that period.
(2) This section shall not apply where, notwithstanding the winding up or insolvency, the business continues to operate.
(3) On the winding up or appointment of a receiver of an employer's business, the claim of an employee or those legally entitled to make a claim to wages on his or her behalf and other payments to which he or she is entitled under this Act or any contract shall have priority over all other creditors, including the State and the social security system for the following amounts—
(a) wages, overtime pay, commissions and other forms of remuneration relating to work performed;
(b) accrued vacation leave benefits as a result of work performed during the 2 years preceding the date of the opening of winding-up or appointment of the receiver;
(c) amounts due in respect of other types of paid absence accrued during the 12 months preceding the date of the opening of winding up or appointment of the receiver;
(d) redundancy pay, severance pay, compensation for unfair dismissal and other payments due to employees upon termination of their employment.
(Amended by Act 6 of 2011)