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.
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