Feeds

'Employees first' ruling nixed after appeal

Legal wrangling

Maximizing your infrastructure through virtualization

The Court of Appeal has overturned a ruling that gave employees priority over administration fees when companies collapse.

The original ruling, handed down by Mr. Justice Peter Smith, stated that when a company goes into administration, cash owed to employees must take priority over the administrators' fees and administration costs.

It prompted concern that the administrations of companies involving large redunancies could have been jeopardised.

After 14 days, the administrators of a company's collapse become responsible for the employment contracts. Justice Smith's ruling would have ringfenced cash for the protective awards these employees would be entitled to, at the expense of the administrator's fees, and legal costs.

According to TheLawyer.com, if Justice Smith's ruling had stood, in similar cases, the administrator could well decide to make all staff redundant, to avoid becoming liable for paying protective awards at a later stage.

The Court of Appeal came to the rescue of administrators and overturned Smith's ruling.

Under UK law when more than 100 employees are to be laid off, the employer must consult with the staff for a period of 90 days before issuing the P45s. If it fails to do so, an employment tribunal can award the employee a so-called protective award, covering salary or wages for a period of up to 90 days. ®

The Power of One Infographic

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.