Enforcement Of Employment Contracts Under The IBC

This is the 1^st article in a 2-part series on employment contracts vis-à-vis CIRP. The article examines whether a resolution professional can enforce an employment contract (for an employee, not a 'workman') during the moratorium period.

The Insolvency and Bankruptcy Code, 2016 (IBC) aims to inter alia preserve corporate debtors as going concerns during the corporate insolvency resolution process (CIRP). To that end, the resolution professional (RP) or liquidator is entitled to compel performance of certain contracts¹ and to disclaim others.²

Section 14(2)³ of the IBC proscribes the termination, suspension, or interruption, of the supply of essential goods or services – electricity, water, telecommunication and information technology services⁴ – to the corporate debtor during the moratorium period.