T&G calls for insolvency law overhaul

Link: TUC defends high street firms

The T&G said the government has left open a crucial loophole and it will now demand fresh changes to get ‘justice for its members’. A T&G spokesman told Accountancy Age that the union intended to take its complaints to the Labour party conference.

The union claims the loophole allows the owners of a troubled business to put itself into voluntary liquidation, acquire its assets and start a new business under a different name.

Sir Bill Morris, general secretary of the T&G, spoke about the legal loophole on Monday when he addressed the TUC conference in Brighton. He referred to the Friction Dynamex case, a long-running dispute in which 86 of the union’s members were sacked in 2001 after striking for eight weeks. An employment tribunal ruled that the staff had been unfairly dismissed and ordered Friction Dynamex to pay the workers compensation.

The company has since been put into voluntary liquidation. Morris said: ‘If that’s not justification for fundamental reform of the law on insolvency then, what is?’

The insolvency service declined to comment.

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