In Oakland v Wellswood (Yorkshire) Ltd, the Employment Appeals Tribunal (EAT) decided that an employee of a business in administration was unable to have the protection afforded to employees under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) when the business in which he was employed was transferred and continued as a going concern with the transferee.

The UK Supreme Court recently handed down judgment in Pimlico Plumbers v Smith1, the latest decision on the hot topic of employment status in the “gig economy”, following the Deliveroo and CitySprint cases in 2017. The court dismissed Pimlico's appeal, holding that the employment tribunal was entitled to find that Mr Smith, who was engaged under a contract describing him as a self-employed plumber, was in fact a worker. He may now proceed with claims of disability discrimination and for unlawful deductions and holiday pay.

An employment tribunal has recently confirmed that employees who have been unfairly dismissed from an insolvent employer can bring an action against a connected successor company.

The tribunal held that there was a ‘commonality of ownership’ between the original and successor companies and that it was correct as a matter of public policy that employees should be able to sue the newco born from the ashes of the insolvent company.

Administrations, including "pre-packs", are not capable of constituting "insolvency proceedings...instituted with a view to the liquidation of the assets of the transferor" within the meaning of Regulation 8(7) of TUPE. Where there is a sale of an undertaking by an administrator, the employees assigned to the undertaking will automatically transfer to the buyer and receive unfair dismissal protection.

Key facts

The Employment Appeal Tribunal (EAT) has held inPressure Coolers Ltd v Molley UKEAT/0272/10 that when a transferor under TUPE is subject to insolvency proceedings not instituted with a view to liquidating the transferor's assets, the Secretary of State will only meet employment liabilities that arise before the transfer.

I am a director and employee of a small media company which has now been put into liquidation by the chief executive due to mounting debts.  The company is due to close any time soon, which means I will then be unemployed.  What rights, if any, do I have as an employee and is there any scope for compensation.

When an employer is insolvent and administrators appointed, job losses are often an inevitable consequence. In this blog we look at the legal obligations arising where redundancies meet the threshold for collective consultation, and the implications for administrators arising out of the recent Supreme Court in the case of R (on the application of Palmer) v Northern Derbyshire Magistrates Court and another.

When does the legal obligation to collectively consult apply?

Welcome to our monthly newsletter, with a summary of the latest news and developments in UK employment law.

In this issue

• Case law updates
• Legislative developments
• Other news
• New guidance
• Consultations

 Recent publications

Managing the financial health of a business to ensure it continues to be viable and successful can be challenging, particularly in today’s economic environment.

June 2023

Contents

This note summarises the duties that directors of companies incorporated in England and Wales are subject to

This note summarises the duties that directors of companies incorporated in England and Wales are subject to.

This note explains those duties, and matters that directors should consider in relation to them, in the context of the COVID-19 pandemic.