Mr A Molloy and others v Braisby Roofing Ltd (In Liquidation) and Secretary of State for Business, Energy and Industrial Strategy: 4103327/2022 and others
EMPLOYMENT TRIBUNALS (SCOTLAND)
Case No 4103327/2022
Between
Mr A Molloy and othersClaimantBraisby Roofing Ltd (In Liquidation) and Secretary of State for Business, Energy and Industrial StrategyRespondent
Before
Employment Judge S MacleanDate 15 September 2023
REASONS
TRIBUNALS (SCOTLAND) Judge S MacLean and others (see schedule) of a respondent TRIBUNAL No representation No appearance and Second Respondent No representation No appearance and First Respondent Solicitor Mr P Kissen - Represented by: Claimants company in On 6 July 2022, the Sheriff Court at Dunfermline (the Court) ordered that the made a joint (Constitution and Rules of Procedure) Regulations 2013 (the ET Rules) for a judgment by consent to be issued. The parties informed the Tribunal that the liquidator of the first respondent did not intend to defend the proceedings and On 6 September 2022, the Tribunal requested confirmation that the Court’s in terms of the On 2 December 2022, the Court having received an application from the On 1 7 January 2023, the claimant’s representative wrote to the Court advising On 26 January 2023, the claimant’s representative wrote to the T ribunal citing the case of Hill and advising of the Court’s view that in the present case its Page 2 On 17 June 2022, the claimants sent to the Tribunal claims for a protective Relations Tribunal advising that its consent would not be required and referred the claimant’s that the Insolvency Act 1996 requires consent of the court in compulsory liquidations even where the liquidator has stated their intention not to defend The Court issued an interlocutor in terms claimants for consent to be granted wrote to the claimants’ representative On 20 January 2023, the Court convened a hearing to hear representations of which the claimants required to make further submissions to the Tribunal. representative to the Court of Session case of Hill v Black [1914] SC 913. 1 of the Employment and Labour and the first respondent for the claims to continue first respondent be placed into compulsory liquidation. Union of the Trade under rule 64 of schedule granted consent for the claims to proceed. On 20 July 2022, the claimants from the claimant’s representative. consent had been obtained Consolid ation Act 1 992 . section Insolvency Act 1986. the proceedings. under application award Background 4. 5. 6. 7. 9. 2. 8. 15 20 5 25 20 15[14]13. 12. 1 1 . 10. Industrial Strategy had a legitimate interest in the issue arising in the case The T ribunal considered that the Secretary of State for Business, Energy and any such hearing. from the Secretary of State for Business, Energy and Industrial Strategy at convened to consider the matter in more detail and to invite representations would be in line with the Tribunal’s overriding objective for a hearing to be The claimant’s representative of the court dealing with the liquidation proceedings”. the claim presented to the Employment Tribunal that no permission is required not agree that where a liquidator has confirmed their intention not to defend Accordingly the will of the liquidator. considered inequitable allowing some claimants to proceed and not others at happened they may do so in some cases in the multiple and not in others. insolvency situations. Judges and Wales require such consent before proceeding Act 1 908, the Insolvency Act 1 986 post-dates Hill. Also colleagues in England are identical to the provisions of section 142 of the Companies (Consolidation) contrary to the express terms of the Insolvency Act 1 986. While the provisions The view of the Employment Judges was that not obtaining consent appeared to apply to the court dealing with the liquidation proceedings for permission. 130(2) of the Insolvency Act 1986; and to ask the claimant to decide whether claim to be accepted; the claimant to be advised of the provisions of section Tribunal’s practice when a company is in compulsory Scotland (then Chairmen) in 2005 following which it had been agreed that the been discussed at some length at a conference On 9 February 2023, the Tribunal wrote to the parties advising that Hill had Court’s view. consent is not required. in Scotland which was why the matter was being discussed the Tribunal advised the claimants’ representative did not that could cause Additionally if the liquidator was left to take the point The Tribunal was asked whether it agreed with the responded that given the wider implications problems of Employment and if Employment liquidation in cross-border that it “does and it was Judges in This had is for the it beyond these claims. Under rule 35 of the ET Rules the Tribunal invited the Secretary of State to participate in the the Secretary of State advised that “yes” had been ticked to defending the be forwarded by the company (or otherwise as may be prescribed) to the register of companies, who shall enter it in its records relating to has been appointed, no action or proceeding shall be proceeded with formerly found in an may be against the company or its property except with the consent of the administrator or the leave of the court.” The provision was replaced with similar wording in schedule B1 to the Insolvency Act 1986 by Page 4 proceedings by either attending the preliminary hearing or providing written In the response form, The Secretary party in his role as statutory guarantor and that he neither supported nor resisted the claim. The grounds On the making of a winding up order, a copy of the order must forthwith When a winding up order has been made or a provisional liquidator or commenced against the company or its property, except by leave of the court and subject to such terms as the court may impose. . . when of resistance did not address the issue of the consent of the Court. Act 1986 which provided “no other proceedings claim so that it could facilitate the submission of a response. A separate provision applies in the case of administration, On 23 May 2023, the Secretary of State responded. Section 130 of the Insolvency Act 1986 states: of State advised that he was an interested amendment within the Enterprise Act 2002. of winding up order order had been made, of the Insolvency which also had wider consequences commenced or continued... Consequences the company. section 11(3)(d) representations. administration “1 (1 ) (2)
The law
[15]16.17. 10 15 20 20 15 30[20]19. 18. “142 Action stayed on winding up order section 142 of the Companies (Consolidation) at the Inner House of the Court of Session which concerned the terms of Hill v Black [1 914] SC 91 3 was not cited to the EAT in Carr. Hill was a case required." to proceed just mentioned must be relevant to the question whether, on what basis, leave legislation, and, accordingly, so as to exclude from its scope claims under the employment seems to us that there is no way of construing section 1 1 of the Act of 1 986 Nonetheless, claims, and to require legislation protection employees unlikely that Parliament really had in mind to place limitations on the ability of “We have a great deal of sympathy with the argument that it seems very EAT stated the following: claim a nullity and that it could be sisted for the consent to be sought. was required. purposes, and that either the consent of the court or leave of the administrator The EAT held that a claim to the Tribunal fell within “proceedings" as no consent had been obtained. The respondent argued that the application to the T ribunal was incompetent unfair dismissal where the claimant and others had been made redundant. statutory provision as to administration In Carr v British International impose." by leave of the court, and subject to the terms as the court may shall be proceeded When a winding up order has been made, no action or proceeding has sought to provide swift and informal means of establishing legislation, should be granted rather than the question to make claims we have to deal with the terms of the legislation as they are. It Also the absence of such consent or leave did not render the particularly having regard to the extent to which that speedy presentation with or commenced against the company except that considerations and enforce Helicopters was considered. rights under Limited [1994] IRLR 212, the Act 1908 which provided: and processing of the kind which we have whether leave is The claim was of the employment such claims. protection for these The of Decree in absence was granted against claim did not plead any objection to competency of the action or the basis of that he was bound to do so himself in light of the absence of the reference to chosen not to defend the action, they should not be taken to have done so as The Inner House held that the company liquidator had waived any objection to the competency and that it was no part of the duty of the sheriffs substitute to put the section into While the Insolvency Act 1989 post-dates Hill that did not mean that the ratio The Tribunal considered that there were two authorities, one from the EAT, and the other from Inner House, which appeared contradictory in effect. The Tribunal considered that the authority in Carr was to be preferred for the In the Tribunal’s view the present case, like Carr fell within the terms of the While the statutory provision was not identical (the company was in administration rather than liquidation) the principle was that the reference to consent in the Insolvency Act 1986 (in that It was also in claim and supported the principle that the Page 6 In Hill, the pursuer brought an action against a company, its liquidator and The secured creditors who defended the absence of consent under that section. The Sheriff substitute did not consider and liquidator had Mr Kissen said that the provisions of section 130 of the Insolvency Act 1986 Act 1908 were identical. It also accords with the ordinary and natural meaning of the words in section 130(2) of the Insolvency Act 1986 and the purpose of the provision which certain secured creditors for the declarator that he was the proprietor case either from the court or the administrator) was necessary. and that as the company and section 142 of the Companies (Consolidation) statutory terms of seeking consent are mandatory. statutory provision as to the “proceedings”. appealed. debentures at a theatre in Dundee. the company and the liquidator. the context of an employment The secured creditors that section in the pleading in Hill does not apply. following reasons. operation. well. Discussion 21 . 23. 25.[22]24. JO 5 15 20 25 30 25 20 15[28]27. 26. terms. Hill is the only authority that suggests that the court need not take note of its necessary. indicated pleading. provision was restricted to circumstances have been unnecessary wished when it did not do so. In addition the leave of administrator to employment of the liquidator if it had so wished to do so in a liquidation or to exclude claims considered that this was significant. liquidation administration Insolvency While the wording well as a second respondent, because of that limit. weeks. Accordingly any award may have an effect on the first respondent, as A protective award may be made for 90 days’ pay being a little under than 1 3 respondent, but which are limited to an award of a total of eight weeks’ pay. is for a protective award, where there are also statutory duties of the second Employment Tribunal (previously the Industrial Tribunal). the present case. Further, it was decided at a time before the creation of the In Hill, the action is of declarator in circumstances to the present case. which the decision was made are, in the Tribunal’s view, materially different party and not a point taken by the court itself, the facts and the statute on While Hill is to the effect that the statutory provision requires to be pled by a that the Court would not do so. consent when the claimants made the application of the circumstances court considers that to be appropriate. appears to be to allow protection for the company that the consent of the court was intended by Parliament Accordingly, which only refers to the consent of the court. The Insolvency Act 1 986 is a statute having effect in Great Britain. Act 1996 are identical in which the leave of the administrator tribunals from the requirements of the Companies of the first respondent. the Tribunal considered to provide for in an administration Parliament could have provided for leave the latter has statutory provisions The Tribunal did not have any details (Consolidation) where a party raised the point in While the Court had not given of leave or consent if it had that the statutory provision are entirely different from there was no suggestion in liquidation where the would suffice and for Act 1908 and the The present claim if the effect of the The Tribunal to be would for In the Tribunal’s view the requirement by section 1 30(2) of the Insolvency Act 1986 for the consent of the court is not so high that it would amount to some form of undue impediment to pursuing the claims. The requirement does not prevent the claimants making an application for a protective award or make it unduly difficult to pursue as such an application to the Court was made in December 2022. Although the matter is for the Court, the Tribunal does not submission to the court for consent under section 130(2) of the Insolvency Act Page 8 understand from the information available that the Court is refusing to give The Tribunal’s conclusion is that as a matter of law the consent of the Court the claims are sisted to allow the claimants to make further of the liquidator. Date of Judgment: 27 June 2023 Entered in register: 28 June 2023 S MacLean is required following the appointment consent to the application before it.
The law
[1]The claimants are entitled to bring this claim because the complaint concerns a failure relating to the election of employee representatives, and the claimant was an employee dismissed as redundant.[2]No response was presented to the claim within the applicable time limit.
Background
[3]The respondent is in compulsory liquidation but the relevant court granted permission for the continuation of these proceedings on 6 July 2023.[4]The complaint that the respondent failed to comply with a requirement of section 1 88 and section 188A of the Trade Union and Labour Relations (Consolidation) Act 1992 is well founded.[5]The respondent dismissed as redundant more than 20 employees at one establishment within a period of 90 days or less.[6]The respondent failed to ensure that employee representatives were elected in accordance with S.188A, and then to consult with them in accordance with s.188.[7]The Tribunal makes a protective award in respect of the claimants as employees who were employed by the respondent at their premises at 24 Dickson Street, Street, Elgin Industrial Estate, Dunfermline, KY12 7SN and the respondent is ordered to pay remuneration for the protected period. The protected period begins with 27 May 2022 and is for 90 days.