Summary

Criminal prosecutions for administrators are rare, and rarer still are prosecutions under employment legislation. However, a recent decision has confirmed that an administrator can be prosecuted and personally liable for a failure to notify the Secretary of State of proposed collective redundancies under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA).

Credit bidding is a mechanism, enshrined in the US bankruptcy legislation, whereby a secured creditor can ‘bid’ the amount of its secured debt, as consideration for the purchase of the assets over which it holds security. In effect, it allows the secured creditor to offset the secured debt as payment for the assets and to take ownership of those assets without necessarily having to pay any cash for the purchase. Whilst there is no statutory equivalent in the UK, the process has evolved here into an accepted practice.

This ThinkHouse TUPE Club Q&A deals with our Top 10 questions on:

• the key employment issues in Administrations and Liquidations; and
• how TUPE applies when there is an insolvency situation.

Q1. What is the effect of insolvency on contracts of employment?

There are various types of insolvency proceedings and these are designed to achieve various different end results. The different types of insolvency also have different consequences for the entity and employees.

Administration