Kieran Pezzack Considers R (on the application of Palmer) (Appellant) v. Northern Derbyshire Magistrates Court and another (Respondents) [2023] UKSC 38

The main issue within the case was whether an administrator appointed under Part II of the Insolvency Act 1986 is an “officer” of the company within the meaning of the phrase “director, manager, secretary or other similar officer of the body corporate” so as to fall within s194(3) of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”). Mr Palmer was prosecuted under the assumption that, as an administrator, he was an “other similar officer” of the company within the meaning of s.194(3) TULRCA.

Mr Forsey was the sole director of West Coast Capital (USC) Ltd (“USC”). On 23 December 2014, Mr Forsey resolved to take steps to place USC into administration. Three joint administrators were subsequently appointed, one of whom was Mr Palmer. USC went into administration of 13 January 2015. The following day, the employees who worked at USC’s warehouse were given a letter by Mr Palmer informing them that they were at risk of redundancy and of USC’s intention to consult with them at a staff meeting that day. Shortly afterwards, the employees were handed a further letter signed by Mr Palmer which informed them that they were dismissed with immediate effect.

On 1 November 2023, the Supreme Court handed down its decision.  In a unanimous decision, the Supreme Court held that an administrator appointed under the Insolvency Act 1986 (“IA 1986”) is not an “officer” of the company within the meaning of the phrase “any director, manager, secretary or similar officer of the body corporate”, as contained in s.194 of the (“TULRCA”).

Notification of the intended redundancies is by way of filing form HR1. Under s.194(1) TULRCA, failure to comply with this requirement is a criminal offence. Section 194(3) provides that any “director, manager, secretary or other similar officer of the body corporate” may be liable to a fine if they consented or conspired with the offence, or if it can be attributed to their neglect.

The decision clarifies that administrators cannot be criminally liable for failure to notify the Secretary of State in relation to redundancies under s.194 TULRCA.  However, there is nothing that prevents administrators from so doing, and it would seem best practice to do so wherever possible.  Whether or not the law will be changed to bring administrators within the ambit of s.194 TULRCA remains to be seen.

For further information on this topic or on any other legal area, please contact John Szepietowski or Kay Stewart at Audley Chaucer Solicitors on 01372 303444 or email or visit our Linkedin page.

Molly Ross

This information was correct as of February 2024


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