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NEWS ROUND-UP |
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In Issue 1 we reported that R3 had highlighted the ambiguous drafting of the new TUPE regulations (SI 2006/246) in terms of the insolvency proceedings in which a relevant transfer could occur. The Insolvency Service has now published guidance, setting out the secretary of state’s view on which proceedings can give rise to such a transfer. This is not an authoritative interpretation of the regulations (which will be given by case law in time), but is how the secretary of state intends to assess whether or not he is liable to make payments to employees out of the NI Fund. No relevant transfer occurs where the transferor company is in: - compulsory liquidation on the ground that it is unable to pay its debts. Employees are entitled to insolvency and redundancy payments out of the NI Fund; or - creditors’ voluntary liquidation, unless there is an agreement between the parties prior to the transfer that the transferee is to be substituted for the transferor. If there is no such agreement, the employees are entitled to insolvency and redundancy payments out of the NI Fund. A relevant transfer can occur where the transferor company is in: - members’ voluntary liquidation. The employees are not entitled to any payment out of the NI Fund, as this is a solvent liquidation; - administration. Certain liabilities will be met out of the NI Fund rather than by the transferee; - administrative receivership. Certain liabilities will be met out of the NI Fund rather than by the transferee; - receivership. The employees are not entitled to any payment out of the NI Fund, as this is a method of enforcement rather than a true insolvency procedure; and - CVA. Certain liabilities will be met out of the NI Fund rather than by the transferee. Regs 4 (which provides that a “relevant transfer” does not terminate employment contracts) and 7 (which provides that the contracts of employees who were dismissed because of a relevant transfer are also transferred to the transferee) of the TUPE regulations do not apply where the transferor is subject to “bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor”. Where regs 4 and 7 do apply, certain liabilities owed to transferring employees can be paid out of the NI Fund instead of by the transferee; where they do not, insolvency and redundancy payments can be met out of the NI Fund (reg 8). |
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Insolvency Service Guidance on application of new TUPE regulations See CLM: ¶6423 |
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The Corporate Manslaughter and Corporate Homicide Bill was introduced into the House of Commons on 20 July. It sets out a new criminal offence of corporate manslaughter which can be committed by companies and other bodies such as government departments and police forces. The offence consists of: - a duty of care owed by the company to the victim in the company’s capacity as: ▪ employer; ▪ occupier of premises; ▪ supplier of goods or services; ▪ constructor or maintainer of buildings, infrastructure, vehicles etc; ▪ user of plant or vehicles etc; or ▪ when carrying out other activities on a commercial basis (e.g. mining); - the company’s breach of that duty of care due to the way in which its activities were managed or organised by its senior managers; - the breach of the duty of care causing the victim’s death. It need not be the only cause; and - the breach of duty being “gross”. The test to be applied is whether the conduct constituting the breach falls far below what could reasonably have been expected. The Bill sets out a number of factors for the jury to consider when reaching its verdict. If found guilty, the court has the power to impose an unlimited fine on the company, as well as requiring it to remedy the management failure(s) which resulted in the victim’s death. The new offence cannot be committed by individuals, although they may be prosecuted for associated ancillary offences such as aiding and abetting the company. The prosecution of the company for corporate manslaughter does not preclude individuals from being personally prosecuted for offences relating to the victim’s death. This Bill aims to address public concern over the difficulties involved in prosecuting a company for common law gross negligence manslaughter, and anticipates that between 10 and 13 prosecutions will be brought a year once the Bill is in force. Although based on the current common law offence, the Bill removes the need for an individual person embodying the company to be personally guilty of manslaughter, focusing instead on the way in which a company is run, which may be by a number of individuals. The concerns raised during the consultation process highlighted questions as to whether the “senior management failure” test achieves this, and so this test is likely to be the focus of much of the debate on the Bill in parliament and the press. A company can be held liable for gross negligence manslaughter if it owed a duty of care to the deceased and breach of that duty was the substantial cause of death, or the breach was so grossly negligent as to show such a disregard for the deceased’s life that it warrants criminal prosecution. An individual who is the “directing mind” of the company must be guilty of the victim’s manslaughter, since the company itself cannot commit acts or omissions; this is known as the “identification principle”. |
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Corporate Manslaughter and Corporate Homicide Bill introduced into parliament See CLM: ¶2591, ¶7178 |