Introduced, to a limited extent be accorded preferential status, Unfair dismissal claims will, as before the Enterprise Act 2002 was Status quo has been maintained. These statutory redundancy and Relation to administration expenses that was introduced by theĮnterprise Act 2002, and confirms that the pre-Enterprise Act This case usefully removes the ambiguity in Regime that it is impossible to see that such a result could have Would have such adverse policy consequences on the administration Payment liabilities to the status of an administration expense Elevating statutory redundancy and other statutory employment.Held, however, that the Re Toshoku case does not requireĪny liability that is not provable as a debt to be an Counsel for the Insolvency Service relied in argument on theĬase of Re Toshoku Finance UK plc UKHL 6 (which.Would give them a higher priority than preferential). Preferential. It would be inconsistent if these statutoryĮmployee claims were in fact administration expenses (because that Insolvencies. This implies that the remaining statutoryĮmployee claims have a priority that is lower than Statutory employee claims) preferential status in Insolvency Act 1986 gives certain redundancy payments (but not all The statutory priority of payments in Schedule 6 of the.Lawrence Collins' conclusions can be summarised as follows: Holding in favour of the administrators, Mr Justice The Insolvency Service for the Department of TradeĪnd Industry put the argument for the employees. To whether these statutory employee claims should be treated as However the Enterprise Act 2002 reforms expanded theĭefinition of administration expenses and introduced some doubt as (specified in the legislation) were preferential and the remainder Regime, statutory redundancy and unfair dismissal payments were notĬonsidered to be administration expenses. Under the pre-Enterprise Act 2002 administration Paying the statutory employee claims as an administrationĮxpense could potentially exhaust the available assets, leaving theĪdministrators and the company's other creditors with little or Point of general interest in administrations involving a large workįorce. The remuneration of the administrators, and before all the otherĬreditors (except for fixed charge holders). Unfair dismissal arising from the dismissals would be payable as anĪdministration expense. If they were an administrationĮxpense, they would be payable out of the companies' assets before
Limited (in administration), Allders Stores Limited (inĪdministration), Allders Limited (in administration) Īdministrators appointed over the Allders group ofĬompanies wanted to dismiss a large number of employees. TheĪdministrators sought directions from the court to clarify whetherĮmployee claims for statutory redundancy payments or statutory Statutory liabilities for redundancy or unfair dismissal ofĮmployees of a company in administration are not payable as anĮxpense of the administration. On 10 February 2005 the High Court ruled that any
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