A sigh of relief for IPs and administrators
The Supreme Court has held that an administrator of a company appointed under the Insolvency Act 1986 was not an ‘officer’ of the company within the meaning of the phrase ‘any director, manager, secretary or other similar officer of the body corporate’ in section 194(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA) and a district judge’s decision holding otherwise had to be quashed (R (on the application of Palmer) v Northern Derbyshigre Magistrates’ Court and anor).
Why is this important? The risk of incurring personal liability is a real concern for administrators, who have to balance this risk against their obligations to the company. The decision means that administrators should not be liable for criminal prosecution under section 194(1) of TULCRA in relation to a company’s failure to give notice to the Secretary of State of proposed collective redundancies (by way of a HR1). Criminal prosecutions under that provision have scope for an unlimited fine.
How can we help? The legal requirement to file a HR1 form when there is a proposal to make 20 or more employees at any one establishment redundant, at least 30 (and in some cases 45) days before any dismissals take effect (or notice of dismissals are served), often needs to be balanced with other pressing and competing matters when a company is going into administration.
Helping Insolvency Practitioners and companies who find themselves in an insolvency process navigate their way through this complex framework is something we can provide as a joined-up service from our Employment and Restructuring teams.
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Jane Haymes Partner 01257 448410 | firstname.lastname@example.org