A law firm which offers more

Call us: 0113 246 0622

Insolvent Companies and the Date of Insolvency for the Purposes of National Insurance Fund Payments

Comments

In the recent case of Secretary of State for Business v McDonagh and others UKEAT/0287/12 and UKEAT/0312/12, the Employment Appeals Tribunal (the “EAT”) had to consider for the first time when the ‘appropriate date’ falls when, in particular, a voluntary insolvency procedure is followed by a compulsory one.

In practical terms, this decision means that employees who are not owed arrears of pay and holiday pay at the time of the voluntary insolvency but then are at the time of the compulsory insolvency, will not be entitled to payment of such arrears from the National Insurance Fund. The EAT acknowledged that the conclusion of this case would lead to unfairness for the employees however the decision was made on a strict interpretation of the legislation.
 

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.