A receiver of a companies assets, who employed former staff of the company, beyond an initial period of 14 days, becomes personally responsible for their employment contracts, and consequently becomes liable for making redundancy payments. The 1870 Act could be used to determine arrears of salary attributable to the period prior to the administrators’ appointment.
Lord Browne-Wilkinson said: ‘This ‘rescue culture’ which seeks to preserve viable businesses was and is fundamental to much of the Act of 1986. Its significance in the present case is that, given the importance attached to receivers and administrators being able to continue to run a business, it is unlikely that Parliament would have intended to produce a regime as to employees’ rights which renders any attempt at such rescue either extremely hazardous or impossible.’
Judges:
Lord Browne-Wilkinson
Citations:
Independent 23-Mar-1995, Gazette 03-May-1995, Times 23-Mar-1995, [1995] 2 AC 394
Statutes:
Insolvency Act 1986 19 44, Apportionment Act 1870 2
Jurisdiction:
England and Wales
Citing:
Appeal from – Powdrill and Another v Watson and Another CA 1-Mar-1994
The administrators of a company are deemed to have accepted the employees who had been kept on after 14 days. A letter from them denying that they would accept them as employees, was insufficient to prevent adoption of the contracts. . .
Cited by:
Appealed to – Powdrill and Another v Watson and Another CA 1-Mar-1994
The administrators of a company are deemed to have accepted the employees who had been kept on after 14 days. A letter from them denying that they would accept them as employees, was insufficient to prevent adoption of the contracts. . .
Cited – Fassihim, Liddiardrams, International Ltd, Isograph Ltd v Item Software (UK) Ltd CA 30-Sep-2004
The first defendant (F) had been employed by a company involved in a distribution agreement. He had sought to set up a competing arrangement whilst a director of the claimant, and diverted a contract to his new company.
Held: A company . .
Cited – Krasner v McMath; in Re Huddersfield Fine Worsteds Limited CA 12-Aug-2005
The administrators had adopted the contracts of certain employees, who now claimed that the protective awards should have priority to the expenses of the administration.
Held: The payments did fall within paragraph 99(5) and do not have . .
Cited – Freakley and others v Centre Reinsurance International Company and others HL 11-Oct-2006
When it became clear that the company would be financially overwhelmed by asbestos related claims, a voluntary scheme of arrangement was proposed under s425. The House was now asked whether the right to re-imbursement of the company’s lawyers after . .
Lists of cited by and citing cases may be incomplete.
Employment, Insolvency
Updated: 15 May 2022; Ref: scu.84826