Is the company going into liquidation ie wound up or is it going into administration ie being looked after by an insolvency practitioner in the hope of keeping it going/selling it to someone else? I assume from your posts he's lost his job but thought had better asked. In answer to the OP no the contract is not null and void but if the co goes into liquidation he will just rank as a creditor (albeit a preferred creditor) and have to wait for the administrator to divvy up assets and see what he gets. The RPO will make *some* payments but only the bare minimum I think, I don't really know huge detail about that. (I do employment law too on the employer side but we bow out when a co goes insolvent so don't know a huge amount about that stage). Re the covenants - no-one can advise him to breach his contract but as GoTT said the enforceability of these depends on the facts and circs of each case really. What I would say is (a) if the co has gone into liquidation they aren't going to be able to enforce the covenant anyway, and presumably the business interest they were hoping to protect has gone and (b) if I'd lost my job in such circs I'd be thinking to hell with the restrictive covenant and just going for whatever I could get and wouldn't pay any heed to it at all. Hope it all gets sorted soon.
Matthew Thomas (April 06)
Jonathan Michael (November 08)