The government has admitted that its interpretation of new regulation
relating to the rights of employees during an insolvency situation is unclear,
The trade body for business recovery and personal insolvency professionals
has claimed that a letter written to president Ron Robinson by Gerry Sutcliffe,
minister for employment relations and consumer affairs, shows that new
regulations intended to clarify the transfer of employees from a struggling
business are still unclear.
Robinson also claims that the letter suggested that clarification would be
attained in time as ‘case law builds up’, a situation Robinson described as a
‘wholly irresponsible approach to legislation’.
‘What the minister’s reply amounts to is – “yes, I know we got it wrong, but
we’re going to leave it to the courts to sort out”,’ said Robinson.
He said R3 would continue to put pressure on government to amend the
‘In the meantime, there will be an unacceptable level of uncertainty, and
much delay, while employees and creditors bear the costs of sorting out the
consequences of the government’s incompetence and complacency.’
The furore is focused on clarification of TUPE law, which relates to the
rights of employees when their company changes hands.
In relation to insolvency, the new regulation contains options to enable more
insolvent businesses to better handle employment issues and give them an
improved chance of operating as going concerns.
But the insolvency profession has described the regulations as ‘vague’ and it
is unclear in which type of insolvency proceeding they are intended to apply.
Steve Absolom and Will Wright from KPMG Restructuring have been appointed joint administrators to City Motor Holdings and associated companies
Partners from Johnston Carmichael have been appointed as joint administrators to Axon Well Interventions Products UK
Begbies Traynor have been appointed administrators of William Anelay Ltd, York, one of Britain’s longest-established construction and heritage restoration companies
Smith & Williamson has been appointed administrators of charity 4Children