Dear IP

7. Rights Of Action - Whether A Bankrupt May Make Claims To Employment Tribunals – Are such claims property rights, thus vesting in trustee, or personal rights?

To draw attention to the decision in Khan v Trident Safeguards Ltd and others, [2004] EWCA Civ 624, where the Court of Appeal upheld an appeal by a bankrupt former employee from an Employment Appeals Tribunal that had decided, as a consequence of his bankruptcy, that the rights of action vested in the trustee in bankruptcy, thus denying him the right to appeal against an earlier decision of an Employment Tribunal which had dismissed his complaints.

The definition of property in section 436 of the Insolvency Act 1986 includes "things in action" but not all rights of action will form part of the bankruptcy estate and vest in the trustee. Some rights of action, particularly those which are personal in nature, relating to injuries to a bankrupt’s person or feelings and without reference to his rights of property, will remain with the bankrupt because although the rights are still property within the terms of section 436, as clearly, they are things in action, they do not vest in the bankruptcy estate because they are personal. It is thus of importance to establish whether a right remains with a bankrupt or forms part of the estate in bankruptcy and vests in the trustee.

Prior to his bankruptcy Mr Khan had made applications to an employment tribunal alleging racial discrimination and victimisation under the Race Relations Act 1976 against his employer and four of its senior employees. The Employment Tribunal dismissed all of the claims unanimously and an order for costs against him was made in his absence.

Later Mr Khan was dismissed by his employer and he then claimed unfair dismissal and victimisation under the Race Relations Act 1976, seeking reinstatement. An Employment Tribunal dismissed this application and he was ordered to pay the company’s costs. Mr Khan filed a notice of appeal from the decisions of the Employment Tribunals alleging that his former employer had (1) racially discriminated against him; (2) victimised him; and/or (3) unfairly dismissed him.

Prior to the hearing of the appeal the former employer served a statutory demand on Mr Khan in respect of its employment tribunal costs, having obtained judgment against him. In consequence, Mr Khan filed his own bankruptcy petition and a bankruptcy order was made against him.

As a result of the making of the bankruptcy order, the Employment Appeals Tribunal rejected Mr Khan’s appeals against the earlier tribunal decisions stating that he did not have the status to prosecute any of the appeals as that right now vested in the trustee in bankruptcy. However, they did give him leave to appeal in all three cases.

The Court of Appeal considered whether Mr Khan had the right to bring the actions in question, in spite of the bankruptcy order, because they were matters where he was seeking personal relief without reference to his rights of property.

The Court of Appeal confirmed its earlier decision in Grady v Prison Service [2003] 3 All ER 745 [24], that a claim for unfair dismissal does not vest in the trustee in bankruptcy where the employee is seeking reinstatement because it is a claim directed at restoring the contractual relationship between employer and employee and is thus a personal claim. The unfair dismissal claim was therefore referred back to the Employment Appeals Tribunal to consider.

As far as the claims for racial discrimination and victimisation were concerned, the Court considered whether those actions were hybrid (partly personal and in part relating to property) as defined in the case of Ord v Upton, [2000] 1 All ER 193, and thus partly vesting in the trustee, or whether they were personal.

Lady Justice Arden stated that in principle, a claim for racial discrimination was a hybrid one, seeking as it does a declaration as to the rights of the parties (personal) and an order for compensation which may not be limited to compensation for injury to feelings (property). However, in this case Mr Khan had amended his claim by withdrawing or disclaiming any desire on his part to seek any remedy incorporating recovery of pecuniary loss or property right, asking instead for a declaration of discriminatory conduct and a claim for injury to feelings. She therefore felt that his claim was not hybrid and thus remained with him rather than vesting in the trustee of the bankruptcy estate.

Lord Justice Buxton agreed with this reasoning although Lord Justice Wall dissented.

On a majority, the Court of Appeal accordingly ruled that these matters should be referred back to the Employment Appeals Tribunal for consideration.

The position would therefore appear to be that depending on what relief or remedy a bankrupt seeks in an action, the claim might be personal to him or vest as part of the bankruptcy estate. It is expected that this uncertainty will mainly appear in claims arising in the field of employment law and related issues. The Grady case left open the possibility that a fund formed from a successful unfair dismissal claim may be claimed as an asset in the bankruptcy.

General enquiries may be directed to IP POlicy Section Email: IPPolicy.Section@insolvency.gsi.gov.uk; Telephone 020 7291 6772

8. Apportionment of Preferential Dividend between RPD and Employees - (forms RP11 & RP12)

Following the repeal of Section 189 (4) of the Employments Rights Act 1996 with regard to insolvencies occurring on or after 15 September 2003, the Redundancy Payments Directorate (RPD) has equal preference with the employee- i.e. the RPD is no longer paid in priority to any other unsatisfied claims of employees. Details of this, together with examples, are included in the booklet ‘Redundancy and Insolvency- A guide for insolvency practitioners to employees’ rights on the insolvency of their employer (2005 - Eighth edition)’ which is on the Insolvency Service website www.insolvency.gov.uk . The examples in the booklet are based on a 50% dividend being declared. Please note that in respect of ‘wages’ the apportionment will apply also to instances where a 100% dividend is declared.

The change necessitates amending forms RP11 & RP12 and it is hoped the revised forms will be introduced by the end of this month.

9. Payment of cheques to the National Insurance Fund

In The January 2005 the Redundancy Payments Directorate advised insolvency practitioners that from 1 April 2005 cheques should be made payable to the ‘National Insurance Fund’ and sent to the following address:

Insolvency Service

Finance Redundancy Payments Team

6^th Floor East

Ladywood House

45-46 St Stephenson Street

Birmingham

B2 4UZ

It appears that in most cases cheques are still being forwarded to AMEY PLC. All insolvency practitioners are asked to ensure that all future payments are sent to the above address. It is intended that the employees’ payments will be handled by the Insolvency Service from July 2005.

10. Birmingham Redundancy Payments Office

Although the Birmingham RPO has not physically moved premises the name of the building has changed. The address now is:

Cobalt Square

83-85 Hagley Road

Birmingham

B16 8QG

And insolvency practitioners should amend their records accordingly.

11. Payments to Employees – exchange of information

The Redundancy Payments Offices (RPOs) have a target to pay 70% of employees’ claims within three weeks of receipt and 92% within six weeks, which has been met. A contributing factor to this is the good working relationship between the RPOs, Insolvency Practitioners and Official Receivers, which the Insolvency Service would like this to develop. One way could be for staff within an insolvency practitioner’s office to gain a greater understanding of the procedures in place to deal with employees’ claims in the RPO. To this end if an insolvency practitioner, or any appropriate staff, are interested in visiting a local RPO please contact the RPO manager who will be more than happy to arrange a convenient date. Equally some of the RPO staff believe that they would benefit from seeing things from the insolvency practitioner’s perspective, and the Insolvency Service would be grateful if insolvency practitioners could contact the local RPO manager if they are able to host such a visit.

General enquiries may be directed to Redundancy.Payments@insolvency.gsi.gov.uk; Telephone 020 7291 6740

12. From 1 October 2005, there is an increase in the National Minimum wage

The Government has recently responded to the recommendations made in the Low Pay Commission's 2005 Report on the National Minimum Wage. The Government have accepted.

The adult rate of the minimum wage (for workers aged 22 and over) will increase from its present hourly rate of £4.85 to £5.05 in October 2005, and to £5.35 in October 2006. The 2006 increase is subject to confirmation by the Commission in February 2006, to check that the economic conditions continue to make it appropriate.
The development rate (for workers aged 18-21 inclusive) will increase from the present hourly rate of £4.10 to £4.25 in October 2005 and £4.45 in October 2006.
NB: The development rate can also apply to workers aged 22 and above during their first 6 months in a new job with a new employer and who are receiving accredited training.
No change to the 16-17 year old rate of £3 an hour. The Government should invite the Low Pay Commission to review the operation of the 16-17 year old rate and to report in February 2006, with recommendations for any subsequent increases.

The following is a link to the DTI employment relations website http://www.dti.gov.uk/er/nmw/index.htm .

General enquiries may be directed to Redundancy.Payments@insolvency.gsi.gov.uk; Telephone 020 7291 6740

13. Transfer of Undertakings (Protection of Employment) Regulations 2006('TUPE') (SI 2006/246)

These new regulations implement EC Council Directive 2001/23/EC and come into force on 6 April 2006.

The new insolvency provisions are contained at regulations 8 and 9 and are intended to aid the rescue of insolvent businesses. Regulation 8 applies where, at the time of the transfer of the undertaking, the transferor is subject to 'relevant insolvency proceedings'. In cases where the employees continue to work for the transferee, or are unfairly dismissed in connection with the transfer (where there is no ‘economic, technical or organisational’ reason entailing changes in the workforce within the meaning of new regulation 7(2)) it provides that some of the transferor's pre-existing debt to those employees does not pass to the transferee but is instead met by the National Insurance Fund (‘NIF’). That is those amounts relating to unpaid wages and holiday pay that are paid out of the NIF under a statutory scheme following the insolvency of an employer.

In addition, where the transferor is subject to relevant insolvency proceedings, subject to certain conditions regulation 9 provides greater scope for the transferee to vary the terms and conditions of employment of the transferring employees after the transfer takes place. The relevant conditions are in the nature of requiring the new employer to agree what are termed ‘permitted variations’ with union or employee representatives, those variations must be made with the intention of safeguarding employment opportunities by ensuring the survival of the undertaking or business, or part thereof, as a going concern, and they must not breach any statutory entitlements.

In regulation 8(6) 'relevant insolvency proceedings' are defined as "insolvency proceedings which have been opened in relation to the transferor not with a view to the liquidation of the assets of the transferor and which are under the supervision of an insolvency practitioner". This definition has been lifted from the EC Directive itself and is thought to include collective insolvency proceedings in which the whole or part of the business or undertaking is transferred to another entity as a going concern.

Any transfers of employees within insolvency situations that are not caught by the definition of ‘relevant insolvency proceedings’ in regulation 8(6), will be subject to regulation 8(7). Under this provision, the contracts of the employees transferred will be terminated and they will not be transferred to the new employer with their pre-existing rights, but any liabilities that arise as a consequence of the termination of the contracts of employment will fall as liabilities within the insolvency. It follows that the transferee will be free to negotiate new contracts of employment with the employees transferred as they see fit.

Departmental colleagues who have brought forward these regulations have indicated that they would expect most transfers of employees falling within the insolvency provisions to fall under regulation 8(6) rather than 8(7) of the new regulations.

A copy of the regulations themselves may be found on-line at http://www.opsi.gov.uk/si/si2006/20060246.htm. Relevant accompanying guidance issued by the Employment Relations Directorate of the DTI is available at http://www.dti.gov.uk/er/individual/tupeguide2006regs.pdf

General enquiries may be directed to Redundancy.Payments@insolvency.gsi.gov.uk; Telephone 020 7291 6740

14. Increase in the National Minimum wage – S.I. 2006 No.2001

The minimum wage is a legal right that covers almost all workers above compulsory school leaving age. There are different minimum wage rates for different groups of workers as follows:

· The main rate for workers aged 22 and over was set at £5.05 an hour. On 1 October 2006 this increased to £5.35 an hour.

· The development rate for 18-21 year olds was set at £4.25 an hour. On 1 October 2006 this increased to £4.45 an hour.

· The development rate for 16-17 years olds was £3.00 an hour. On 1 October 2006 this increased to £3.30 an hour.

· On 1 October 2006 the rate of the accommodation offset increased to £29.05 per week (£4.15 per day). The previous rate was £27.30 per week (£3.90 per day).

It is important to note that these new rates only apply to pay reference periods beginning on or after the date they came into law.

The following is a link to the DTI employment relations website

http://www.dti.gov.uk/employment/pay/national-minimum-wage/index.html

Any enquiries regarding the above should be directed towards the National Minimum Wage Helpline on 0845 6000 678.

15. The Employment Equality (Age) Regulations 2006 - S.I. 2006 No.1031

The Employment Equality (Age) Regulations 2006 came into force on 1 October 2006. For employees’ who are dismissed on or after 1 October 2006 (that is the actual termination date, not the projected date in cases where employees’ are dismissed without notice) the following limits no longer apply

· The lower age limit of 18

· The upper age limit of 65

· The taper at 64

For redundancies made before 1 October 2006, the amount will be calculated as

· For each complete year of continuous service between the ages of 18 and 21, the redundant employee will receive half a week's pay.

· For each complete year of continuous service between the ages of 22 and 40, the redundant employee will receive one week's pay.

· For each complete year of continuous service between the ages of 41 and 65 the redundant employee will receive 1½ weeks' pay. However, if the redundant employee is over 64, the total amount of the payment received will be reduced.

For redundancies made on or after 1 October 2006, the amount will be calculated as

· Up to the age of 21, the redundant employee will receive half a week’s pay for each completed year of service.

· 22 - 40 years of age, the redundant employee will receive one week’s pay for each completed year of service.

· 41+ years of age, the redundant employee will receive 1½ weeks' pay for each completed year of service.

Further information about this matter, including the updated ready reckoner, is available on the DTI website on the following reference

http://www.dti.gov.uk/employment/employment-legislation/employment-guidance/page15686.html

The Redundancy Payments Directorate is currently updating the RP1 form and booklets to reflect these changes but they are not expected to be ready for use until November/ December.

Any enquiries regarding the above should be directed towards the Redundancy Helpline on 0845 145 0004, or email Birmingham.rpo@BIS.gsi.gov.uk

16. Offsetting pensions against redundancy payments

Under the Redundancy Payments Pensions Regulations 1965, employers may offset pensions or lump sums which are paid immediately on redundancy or within a short time after and which satisfy the qualifying conditions. According to the amount of the pension or lump sum payable, the statutory redundancy payment due may be either reduced or extinguished completely. Employers are not compelled to offset pensions or lump sums in this way, or to apply the maximum offset.

Please note that pensions may not be offset against statutory redundancy payments made to employees dismissed on or after 1 October 2006 [The Employment Equality (Age) Regulations 2006]

Further information about this is available on the DTI website on the following reference

http://www.dti.gov.uk/employment/employment-legislation/employment-guidance/page16043.html#General_rules_for_offsetting

Any enquiries regarding this article should be directed towards the Redundancy Helpline on 0845 145 0004, or by email to Birmingham.rpo@BIS.gsi.gov.uk

17. Employees right to elect union representatives to receive information from the administrator

Insolvency practitioners are reminded that employees of a company in administration, where they are creditors of that company, may elect a union or other workforce representative to receive information from the administrator on their behalf. Such representatives may also attend meetings on the employee’s behalf and vote according to their wishes by way of proxy. Any such election by the employee should be made in writing.

General enquiries may be directed to Policy.unit@insolvency.gsi.gov.uk; Telephone 020 7291 6740

18. Protective awards when a company is in liquidation

In the case of Day v Haine and another [2007] All ER (D) 298 (Oct), the court held that protective awards made pursuant to section 189 of the Trade Union and Labour Relations (Consolidation) Act 1992 were not debts provable in the liquidation of a company in circumstances where they were made after the date of liquidation.

The Court of Appeal has now set down a hearing date in this case for either 23 April 2008 or 24 April 2008.

The Redundancy Payments Directorate (RPD) will continue to submit a proof of debt in respect of protective award payments. Insolvency practitioners are requested not to formally reject the proof of debt (nor request a revision of proofs of debt already submitted) pending the Court of Appeal’s judgment.

If an insolvency practitioner feels unable to delay making a decision and formally rejects the claim, the RPD will have to appeal to the court against the decision and ask for the case to be stayed until the outcome of the Court of Appeal case is known. This could involve unnecessary legal and time costs.

Any enquiries regarding this article should be directed towards Barbara Roberts, Senior Policy Advisor, Area 5.8, 21 Bloomsbury St, London WC1B 3QW. Telephone: 0207 637 6463, email: Barbara.Roberts@insolvency.gsi.gov.uk

General enquiries may be directed to redundancy.payments@insolvency.gsi.gov.uk

Telephone: 0207 637 6477

19. Payments made by the Redundancy Payments Directorate

Payments made to employees of insolvent employers are those that the employer owes to the employees concerned. Once the payments are made the Redundancy Payments Directorate (RPD) expects the payments to be accepted in the insolvency.

In the majority of cases the information concerning the type of debt owed, and the amount, is supplied by the insolvency practitioner on Form RP14a. As such there should be no dispute about the payments being lodged in the insolvency. If an insolvency practitioner has any doubt about an employee’s claim the doubt should be brought to the RPD’s attention before any payment is made. If after further consideration the RPD and insolvency practitioner cannot agree on eligibility for payment the claim to the RPD will be rejected on the basis that the insolvency practitioner denies there is such an employer’s debt owed.

The employee will be advised of his/her right to refer the matter for determination by an Employment Tribunal. In such instances the RPD may ask the tribunal to request the appearance of the insolvency practitioner to give evidence as to why the debt is disputed.

General enquiries may be directed to redundancy.payments@insolvency.gsi.gov.uk

Telephone: 0207 637 6477

20. Redundancy Payment Directorate Inspectors visits – wages and eligibility checks

Redundancy Payment Directorate (RPD) Inspectors visit insolvency practitioner’s offices to check wages and personnel records to validate claims made by dismissed employees. As most of the visits are post payment of claims it is possible that when an appointment is made by Inspectors the records are already in storage. Where this is the case it would be helpful if the records could be retrieved as soon as possible. In the event that the records are not available when the Inspector is due to visit insolvency practitioners are asked to inform the local Redundancy Payments Office as soon as possible to avoid any wasted journeys.

General enquiries may be directed to redundancy.payments@insolvency.gsi.gov.uk

Telephone: 0207 637 6477

21. Completion of Form RP14a

There can be instances where there are no wages and personnel records from which the insolvency practitioner can complete a Form RP14a other than by taking the information from the claimant’s RP1 Form. In such cases the Form RP14a should be clearly noted to the effect that the information is derived only from the RP1 Form and that it has not been checked against the employer’s records.

General enquiries may be directed to redundancy.payments@insolvency.gsi.gov.uk

Telephone: 0207 637 6477

22. Miscellaneous employment issues

IL1 - IP’s Redundancy and Insolvency – ‘A guide for insolvency practitioners to employees’ rights on the insolvency of their employer’.

The IL1 has now been revised and will be available on the Insolvency Service web site shortly.

Annual uprating of statutory limits

The Department for Business Enterprise & Regulatory Reform (BIS) website gives full details of the current statutory limits in respect of redundancy payments. The website is updated when the limits change. The information can be accessed at the following address:

http://www.BIS.gov.uk/employment/employment-legislation/employment-guidance/page19310.html

The BIS contact for any queries concerning the limits and uprating is:

Liz Lowe, Senior Policy Advisor, Employment Relations Dispute Resolutions, BIS, 1 Victoria Street, London SW1H 0ET.

E-mail: liz.lowe@BIS.gsi.gov.uk

New claims handling system - CHAMP (Claims Handling and Making Payments)

As you may be aware the Redundancy Payments Directorate (RPD) is moving towards a new claims handling system known as CHAMP. A working group made up of RPD staff has had numerous meetings to try to ensure that the system meets the requirements not only of the RPD but also that it will be fit for insolvency practitioner’s purposes. To that end a meeting was held in London and another in Leeds at which some insolvency practitioners were represented. This was very useful from both sides. If any insolvency practitioner wishes to participate in future workshops please could they email their contact details to:

redundancy.payments@insolvency.gsi.gov.uk

Claims for unpaid pension contributions

There have been some instances of claims for unpaid pension contributions including details of employee’s dependents. Insolvency practitioners are asked to ensure that pension claims are only submitted in respect of employees.

General enquiries may be directed to redundancy.payments@insolvency.gsi.gov.uk

Telephone: 0207 637 6477

23. Protective awards as a provable debt in insolvency

Further to Article 18, Chapter 11 of Issue 35 of Dear IP the Court of Appeal has ruled that a protective award is indeed a provable debt in an insolvency (re Haine & SoS v Day [2008] EWCA Civ 626). A copy of the judgment is available via the following link:

http://www.bailii.org/ew/cases/EWCA/Civ/2008/626.html

There will consequently be no changes to the Redundancy Payments Services proof of debt forms.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

24. Claims from directors

The circumstances in which a director and majority shareholder of a company may be regarded as an employee (as defined in section 230 of the Employment Rights Act 1996) has been the subject of Court of Appeal decisions in re Secretary of State for Trade and Industry v Bottrill [1999] ICR 592 and re Connolly v Sellers Arenascene Ltd [2001] ICR 760 as well as the judgment of the Inner House of the Court of Session in re Fleming v Secretary of State for Trade and Industry [1997] IRLR 682.

However, there have been a number of recent Employment Appeal Tribunal (EAT) decisions in which the legal approach has diverged from that stated in Bottrill and Fleming in particular. The trend of the recent EAT decisions has been to limit both the nature of the inquiry which should be undertaken by the Employment Tribunals, and the evidence which is to be regarded as relevant. There are conflicts and a consequent lack of clarity within the authorities which is deeply unsatisfactory as Employment Tribunals cannot be clear as to which approach they ought to follow. Consequently there is undoubted potential for confusion and error, and in turn unnecessary appeals.

In view of this the Court of Appeal has granted the Secretary of State leave to appeal against the EAT judgment in the case of re Neufeld v Secretary of State for Business Enterprise and Regulatory Reform. The hearing date is anticipated to be in December 2008. Hopefully this will resolve the current state of confusion. In the meantime Redundancy Payments Services will continue to assess the employee status of directors in line with the Bottrill guidelines.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

25. Holiday pay claims

As part of corporate governance checks undertaken on employees’ claims for payment from the National Insurance Fund (NIF) on the insolvency of an employer, Redundancy Payments Services (RPS) has designed spreadsheets to check accrued holidays due on termination of employment.

Under the Working Time Regulations, employees (and workers) have the right to:

4 weeks paid leave each year before 1 October 2007; increasing to

4.8 weeks paid leave each year from 1 October 2007; increasing to

5.6 weeks paid leave each year from 1 April 2009.

During the transitional periods the amount of statutory leave due will depend upon the period of the leave year that falls before and after the dates of the respective increases. The employees are also allowed to carry forward the extra statutory leave allowance into the following leave year if it is not reasonably practicable for them to take it before the end of the leave year.

The spreadsheets cover the October 2007 increase, the April 2009 increase and the normal calculation for when there is no increase during the leave year. If you are interested in receiving a copy of the spreadsheet to understand how RPS assess entitlement due from the NIF in accordance with the Working Time Regulations, please telephone the RPS helpline on 0845 145 0004 or email redundancy.payments@insolvency.gsi.gov.uk

26. Redundancy Payments Services (RPS) claims handling

There has recently been an increase in the amount of redundancy claim related work. The amount of claims received by the RPS is up by some 35% on this time last year. This results in an inevitable increase in telephone calls from employees anxious to know what stage their claim has reached. The RPS aims to pay 78% of claims received within three weeks and 92% within six weeks.

Clearly, employees expect the RPS to act on their claim as soon as the RP1 form is received. However, no action can be taken on any claim until the RP14 and RP14a forms have been received. It would therefore be helpful if claim forms are only forwarded together with the RP14 and RP14a (or later if claims are made after that time) as claims received prior to receipt of them are effectively in limbo. As insolvency practitioners will appreciate the RPS has little alternative other than to tell the enquirer that we are still awaiting information from the relevant insolvency practitioner.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

27. Fraudulent claims for payment from the National Insurance Fund (NIF) on the insolvency of an employer

An unfortunate side effect of the recent increase in the redundancy payment claims workload is an increase in the number of fraudulent claims being received. These include, amongst others:

Claims from people who do not reside at the addresses shown on the RP1 and who cannot be traced
Claimants using other people’s national insurance numbers
Director’s bank accounts being nominated for receipt of payments
Rates of pay on the RP1 being higher than that shown in wages records
Maximum amounts in respect of arrears of pay and/or holiday pay being claimed when the employee has already received some or all of the money from the employer
Claims from people who do not even appear in the employer’s records
Claims from foreign workers who are working illegally

Clearly no system is foolproof but in view of the increase of such instances insolvency practitioners need to be vigilant to prevent fraudulent claims wherever possible. Redundancy Payment Services (RPS) assumes that the information on the RP14a has been verified from the employer’s records before it is sent to the RPS. If there is any doubt about the validity of any claim this should be drawn to the attention of the RPS as soon as possible.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

28. Completion and signing of RP14 form

There have been instances of RP14 forms being sent to the Redundancy Payments Offices (RPOs) having been signed by a member of staff rather than the insolvency practitioner him/herself. Section 187 of the Employment Rights Act 1996 requires that the information the RPO needs must be provided by “the relevant officer” and section 187 (4) of that Act defines who is the “relevant officer” – essentially it is the licensed insolvency practitioner. We have received legal advice to the effect that only the “relevant officer” should sign the RP14 form. As such, to avoid delays in having to return RP14 forms insolvency practitioners are asked to ensure that only they, as the “relevant officer”, sign the form prior to it being sent to the RPO.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

29. Payment of cheques to the National Insurance Fund (NIF) – relocation of finance team

In May 2008 the Finance Redundancy Payments Team moved premises. Please ensure that cheques are made payable to the NIF and sent to:

Insolvency Service
Finance Redundancy Payments Team
Cannon House
18 Priory Queensway
Birmingham
B4 6BS

Please ensure that you quote the Redundancy Payments Office (RPO) case reference number when sending these cheques.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

30. Proofs of debt – Crown set-off

If a new proof of debt is requested by insolvency practitioners following notification that HM Revenue & Customs has applied Crown set-off, it would be helpful if it could be made clear that the request is as a result of the set-off, not that a new copy of the original proof of debt is requested. The Redundancy Payments Office will then recalculate the debt taking the set-off into account.

Enquiries regarding this article may be directed towards redundancy.payments@insolvency.gsi.gov.uk

31. The Employment Rights Act 1996 and sensitive personal information

The Redundancy Payments Service (RPS) has recently conducted a review of the way it handles sensitive personal information. By that we mean how we use and store information that includes names of claimants, national insurance numbers and bank account details.

From now on when RPS need to send insolvency practitioners any computer generated form, letter, fax or email we will only include the minimum of sensitive personal information to enable you to identify that it is the correct claimant, namely the full name and the last four digits of their national insurance number.

We hope that this will not cause insolvency practitioners undue difficulties but we do recognise that on very rare occasions this information may be insufficient. If that is the case please contact the relevant Redundancy Payments Office case officer who will be able to assist.

If RPS need to return any RP1 and RP14A forms to insolvency practitioners, which contain full personal details, we will do so only by recorded delivery mail or in instances where there are large numbers of claimants by courier or by hand.

We appreciate that insolvency practitioners also hold as much sensitive personal information as RPS, and would therefore ask insolvency practitioners to ensure that this type of information is handled carefully and that when sending RP1 and RP14A forms they are addressed to the correct office or official (if known).

If you have any queries about this notice, please contact Barbara Morris who is the Information Asset Owner for The Redundancy Payments Service on 0121 678 1802 or email at Barbara.Morris@BIS.gsi.gov.uk

32. Employment Rights (Increase in Limits) Order 2008/3055

With effect from1 February 2009 the statutory limit on a weeks pay for the purpose of calculating a redundancy payment increases from £330 to £350. A copy of the above relevant statutory instrument is available at the following web site address:

http://www.opsi.gov.uk/si/si2008/uksi_20083055_en_1

Enquiries regarding this article may be directed toward towards redundancy.payments@insolvency.gsi.gov.uk

33. Advance Notification of Redundancies (HR1 form)

Trade Union & Labour Relations (Consolidation) Act 1992.

Employers proposing to make 20 or more employees redundant at one establishment within a period of 90 days must both consult with employees’ representatives, and also notify the Secretary of State of the proposed redundancies, at least 30 days before the first of the dismissals takes effect. If the number of proposed redundancies is 100 or more the consultation and notification must take place at least 90 days prior to the first dismissals. In practice the notification to the Secretary of State is made by completion of an HR1 form which is sent to the Insolvency Service’s Redundancy Payments Office in Birmingham.

The timely completion of an HR1 is not simply a device to protect an employer against the possibility of an employment tribunal making a protective award for the failure of the employer to comply with the consultation requirements of the Trade Union & Labour Relations (Consolidation) Act 1992. It is an important tool in mitigating, as much as possible, the effect of redundancy on employees. The requirement to consult employee’s representatives about proposed collective redundancies is for the employer and employee’s representatives to have sufficient time to allow for meaningful discussions to take place to seek ways to either avoid the redundancies or at least to reduce the numbers concerned.

Clearly this will not always be possible and it is for this reason that it is important that the Secretary of State is notified of the proposed redundancies at the earliest possible stage. Government has a statutory obligation to assist employees facing redundancy and in order to discharge that liability information given in HR1 forms is passed to other Government Departments and Agencies so that measures can be put in place to assist redundant employees in the event that the consultation process in not successful. Information is NOT given for any other purposes nor is it released to any outside bodies, including the media.

In the current economic climate many insolvency practitioners may have been asked to advise clients on ways to restructure their businesses – not whilst formally acting as an insolvency practitioner but rather on a consultancy basis as a turnaround professional. If it is likely that redundancies are possible in any restructuring it would be prudent to remind those clients of their obligations to consult as outlined above. The client should also be made aware that the law does not absolve an employer of those obligations simply on the basis that the employer is insolvent.

Enquiries regarding this article may be directed toward towards redundancy.payments@insolvency.gsi.gov.uk

34. BIS – Business Link

Business Link is the multi-channel business support service providing customers with access to the help and support needed in both starting and developing/restructuring a business. Employers contemplating redundancies can contact Business Link for advice targeted at getting them through a difficult period. Early intervention can help business manage a potential redundancy situation effectively and Business Link can advise on options for keeping people in employment. In the event that redundancies are inevitable Business Link can offer advice on self –employment and, together with Jobcentre Plus, entitlement to benefits like Jobseekers Allowance.

Further information about Business Link can be obtained on the following web site address:

www.businesslink.gov.uk/bdotg/action/home

Enquiries regarding this article may be directed toward towards redundancy.payments@insolvency.gsi.gov.uk

35. Claims to the National Insurance Fund

There has been a marked increase in claims to the National Insurance Fund especially during the past few months. However, the Redundancy Payment Offices (“RPOs”) are still keeping their processing targets of 78% of claims paid within 3 weeks and 92% paid within 6 weeks. To help us ensure that claims are paid as quickly as possible, it would be useful if insolvency practitioners could forward the completed RP14, RP14a forms (or spreadsheet) and all available RP1 forms together as a pack.

This will not only save us time, but will reduce the inconvenience to you by minimising the number of telephone calls we make to you when RP1s are sent prior to the RP14 & RP14a. It is appreciated that this will not always be possible, particularly in large cases, and if so once the RP14 & RP14a have been sent to the RPO, the RP1s can be sent in batches. You can contact the RPO to agree the arrangements for sending batches of claims.

National Minimum Wage (NMW)

As you may be aware, the NMW rates increased on 1 October 2008 to:

Workers aged 22 and over - £5.73 per hour

Workers aged 18-21 - £4.77 per hour

Workers aged 16-17 - £3.53 per hour

From 6 April 2009 the way HMRC Compliance Officers calculate arrears of wages owed by employers for non compliance with the NMW is changing.

Full details are available on the HMRC website:

http://www.hmrc.gov.uk/index

Any enquiries regarding this article should be directed towards Ian Facer at Insolvency Service, Redundancy Payments Service, 21 Bloomsbury Street, London, WC1B 3QW. Tel: 0207 291 6888 email: ian.facer@insolvency.gsi.gov.uk

General enquiries may be directed to email:redundancy.payments@insolvency.gsi.gov.uk

36. Employment Act 2008 – Employment Tribunal awards

From 6 April 2009 the dispute resolutions provisions introduced in the Employment Act 2002 will be repealed in respect of disputes originating from that date. The 2002 provisions provide for employment tribunals to increase or decrease awards depending upon the seriousness of a party’s failure to comply with the dispute resolution procedure. Under the new regime employers are expected to handle dismissals with regard being paid to an ACAS Code of Conduct. Failure to do so may render a dismissal as unfair and employment tribunals could then increase the compensation award by up to 25%. An increase of a Basic Award for unfair dismissal can be claimed from the National Insurance Fund. Increases in the compensatory element are not payable from the Fund.

In addition to unfair dismissal awards, the 2008 Act introduces new powers for employment tribunals to award additional financial loss to workers who have brought successful claims for either a redundancy payment or unlawful deduction of wages where that loss is attributable to the employer’s non-payment. Although these increases may be lodged in the insolvency they are not payable from the Fund.

General enquiries may be directed to email:redundancy.payments@insolvency.gsi.gov.uk

37. Upgrade to RPS computer system – new email contact details

The Insolvency Service is currently upgrading its computer system, including all of the Redundancy Payments Service (RPS). The RPOs e-mail addresses are now:

Birmingham RPO – birmingham.rpo@insolvency.gsi.gov.uk

Edinburgh RPO – erpo@insolvency.gsi.gov.uk

Watford RPO – wrpo@insolvency.gsi.gov.uk

General enquiries may be directed to email:redundancy.payments@insolvency.gsi.gov.uk

38. Notification of redundancies – working with Job Centre Plus

The Insolvency Service, Jobcentre Plus (part of the Department for Work and Pensions) and R3 have been working together to ensure that when employees of a company in administration are made redundant the support provided by Jobcentre Plus (“JCP”) is made available to them as quickly as possible.

This will ensure that the employees are signposted correctly and at the right time – whether that be support for making a claim for benefit, to access specialist job search support or to undertake skills analysis and subsequent up-skilling or re-training.

This work follows a campaign by Phil Wilson, MP for Sedgefield, who highlighted the issue by means of an Early Day Motion in January 2009 and introduced a Private Members Bill in April 2009 requiring administrators to provide information to employment agencies (Job Centre Plus) when planning redundancies. Ministers see real value in promoting greater co-operation between insolvency practitioners and Job Centre Plus. Although they think that can be achieved without the use of legislation they strongly support closer working to ensure that people faced with redundancy get the help they need as quickly as possible.

A memorandum of understanding is currently being developed between The Insolvency Service, JCP and R3. The approach is designed to work with both individual administrators and the wider sector to provide the very best service to all customers and stakeholders and where possible to impact JCP performance. This is visible through;

· A different and speedy national response that adds value and enhances local rapid response processes;

· Working with employers, partners and IT to link redundant workers to jobs through identifying suitable opportunities in specific locations;

· Early access to employers facing insolvency and using the 90 day consultation period to better engage with the Learning and Skills Council National Employer Service and individuals to identify and accredit transferable skills;

· Identifying situations quickly and working with employers and partners to minimise the number of individuals having to claim benefit by finding alternative employment opportunities;

· Sharing information at the right time to enable full support to be supplied under the Rapid Response Service that JCP operates to all affected employees and;

· Equipping insolvency practitioners with information to support their liaison with the employer.

The principles that underpin the memorandum of understanding are that all stakeholders within the partnership will benefit from the arrangement. It is envisaged that by working more closely together JCP will be able to actively support insolvency practitioners by:

Having experts on hand to answer questions;
Releasing the pressures on insolvency practitioners as others will be on hand to manage information and employee queries;
Offering a professional rounded service between us;
Offering suitable contacts at the appropriate time;
Looking to secure premises to deliver information or specialist advice sessions where appropriate;
Helping reduce the anxiety and uncertainty felt by employees impacted by redundancy;
Supporting preventative measures to alleviate or prevent redundancy;
Acting as a single point of contact to national and localised situations as JCP will seek to engage with their local partners and organisations;
Building insolvency practitioners’ confidence in our ability to work commercially in confidence;
Enhancing the JCP/administrator image
Co-ordinating national and regional responses.

A flurry of activity has taken place since we embarked on this new way of working that includes;

The building of key relationships between R3, The Insolvency Service and JCP;
The issue of a jointly prepared (R3 and JCP) briefing note to all insolvency practitioners, which gave an insight into JCP structures, processes and contact details. This also included the need to contact JCP where a company was making 20 or more redundancies in any situation dealt with by the insolvency practitioner;
Liaising with R3 regional chairs to work with JCP Regional Rapid Response Managers and mapping the best fit going forward;
Early notification between insolvency practitioners, The Insolvency Service and JCP for potential large numbers of redundancies within a company, before press announcements have been made, and;
Notification of some job losses from insolvency practitioners to national or regional JCP contacts.

This improved way of working has already produced some success with JCP able to support insolvency practitioners and affected employees where they have been given prior notification of redundancies once the company is placed in administration. To date 50% of the notifications received have been at least a day before the employees have been notified of an imminent redundancy situation. In these cases JCP have been able to implement one or more of the following;

Attendance on site alongside the administrator delivering information session about benefits, job search and re-training opportunities;
The signposting of employees to future specialist information sessions where strategic partners have been engaged to deliver Skills Training Analysis, CV surgeries or general job search advice, and;
Ensuring that JCP leaflet and signposting documentation has been made available to insolvency practitioners to issue along with redundancy packs for employees.

The best scenario for JCP is the earliest possible notification of impending redundancies. An excellent example of this was a call from an insolvency practitioner who had been put on standby to deal with an employer as there was a strong possibility of the insolvency practitioner being appointed as administrator the following week (8 days notice). They subsequently gave JCP enough notice and information to;

Share the information with key personnel in The Insolvency Service of the potential job losses;
Put in place a contingency plan to deal with the situation locally;
To ramp up JCP support for on site talks scheduled to take place the following week;
Impact the effect of potential new claims to the business and target staff resource to meet the increased footfall in JCP offices, and;
Enable time for potential vacancies and opportunities to be pulled together to share with the affected employees.

Further information about the development of the memorandum of understanding between The Insolvency Service, JCP and R3 will be provided in future issues of Dear IP.

Any enquiries regarding this article should be directed towards Sharon Lewis, Director of Redundancy Payments Services; telephone: 020 7637 6436 email: Sharon.Lewis@insolvency.gsi.gov.uk.

Enquiries regarding Jobcentre Plus should be addressed to Anne Pavey, Employer Engagement Division, Employers and Stakeholders Directorate, Jobcentre Plus
West Midlands Regional Office; telephone 0121 452 5295.

39. Consultation with employees facing redundancy and notification of proposed collective redundancies to the Secretary of State

Pat McFadden, the then Minister for Employment Relations, wrote to all insolvency practitioners on 4 March 2009 regarding the need to consult with employees’ representatives as soon as possible when collective redundancies are proposed. He also reminded insolvency practitioners of the requirement to notify the Secretary of State of such proposed redundancies by forwarding a completed HR1 form to The Insolvency Service’s Birmingham Redundancy Payments Office (RPO). The HR1 can be forwarded electronically to: HR1@insolvency.gsi.gov.uk

Perhaps in some instances the failure to comply with either or both of these requirements is more perceived than actual. Nevertheless this matter continues to generate great concern across a wide spectrum of interested parties and we feel it is right to make insolvency practitioners aware of these ongoing concerns.

The insolvency of an employer does not discharge that employer from these obligations. Immediately it is felt that collective redundancies are likely, consultation should commence and the HR1 forwarded to the RPO. This should be done by the employer once it becomes necessary to consult an insolvency practitioner, not waiting until an insolvency practitioner has actually been appointed. If an employer genuinely believes that open consultation could jeopardise the business the employees’ representatives may be asked to keep details of the consultation confidential.

Insolvency practitioners who are initially acting only on a consultancy basis should make every effort to persuade the client to both consult and complete an HR1 as soon as possible. If the employer fails to do so and becomes legally insolvent the consultation and notification requirement will fall on the insolvency practitioner.

The HR1 is treated as commercially confidential and details are not given to any outside organisations other than government agencies that are tasked with providing help and support to redundant employees. The more notice these agencies have of proposed redundancies the more effective their actions will be. It is for this reason that early completion of the HR1 is essential.

It should be remembered that the need to consult and complete an HR1 are separate from the consultation requirement under Regulation 13 of the Transfer of Undertakings (Protection of Employment) Regulations 2006

Any enquiries regarding this article should be directed towards Dave Rowan at Insolvency Service, Redundancy Payments Service, 21 Bloomsbury Street, London, WC1B 3QW. Tel: 0207 637 6448 email: dave.rowan@insolvency.gsi.gov.uk

General enquiries may be directed to: :redundancy.payments@insolvency.gsi.gov.uk

40. Miscellaneous employment issues

Consultation with employees facing redundancy and notification of proposed collective redundancies to the Secretary of State

Further to Article 39 of Issue 40 of Dear IP, insolvency practitioners should note that this issue still continues to generate a great deal of concern across a wide spectrum of interested parties. The Redundancy Payments Service therefore feel it is right to remind insolvency practitioners of these ongoing concerns and to draw your attention to the relevant statutory requirements regarding consultation and notification as set out in Article 39 of this chapter.

The Work and Families (Increase of Maximum Amount) Order 2009

(SI 2009/1903)

With effect from 1 October 2009 the statutory limit on a weeks pay increases to £380. A copy of the above Statutory Instrument is available at the following web site address: www.opsi.gov.uk

Clarification of email address for the Birmingham Redundancy Payments Office

The Birmingham RPO has two email addresses. All communications from insolvency practitioners should be sent to Birmingham.rpo@insolvency.gsi.gov.uk. The other address, which some insolvency practitioners appear to be using, is for internal communication only. Any message sent to that address may not reach the intended recipient.

Payment Processing Times

It appears that some insolvency practitioners are advising claimants that it will take at least six weeks for the RPOs to process their payments. In fact the RPOs aim to process 78% of claims within three weeks and 92% within six weeks from the date the office receives the claim.

There have been a number of telephone calls from claimants to the RPO enquiring about the processing time and this is having an impact on the speed of processing claims. It would be helpful if insolvency practitioners would advise claimants of the RPO targets and ask them not to ring the RPO unless it is necessary – i.e. to notify a change of address, bank details etc.

Due to the high volume of claims still being received, the RPOs are not taking telephone calls between ten and eleven o’clock in the morning and between two and three o’clock in the afternoon. This is to allow staff time to process claims. If insolvency practitioners need to contact an RPO during these hours an e-mail can be sent to the RPO and a case officer will ring back as soon as possible.

Any enquiries regarding this article should be directed towards Ian Facer, Redundancy Payments Service, 21 Bloomsbury Street, London, WC1B 3QW. Telephone: 020 7 291 6888 email: ian.facer@insolvency.gsi.gov.uk

General enquiries may be directed to: redundancy.payments@insolvency.gsi.gov.uk

41. Wages check visits

Insolvency practitioners will be aware that one of the responsibilities of the Redundancy Payments Offices (“RPOs”) is to ensure that payments made from the National Insurance Fund are made in accordance with the legislation governing such payments. One way of doing this is to carry out a check of a company’s wage records held by the insolvency practitioner. On occasions when inspectors contact an insolvency practitioner to arrange a wages check, especially if it is one they haven’t visited for a while or the practitioner’s staff are new to employment issues, they are surprised that the RPO wants to see the wages records and question the inspector’s authority.

An Inspector’s authority is covered by sections 169 and 190 of the Employment Rights Act 1996. Insolvency practitioners are asked to ensure that their staff understand the scope of the inspector’s authority and assist them wherever possible. The RPOs appreciate the current arrangement of not having to give written notice to inspect these records. This benefits both the RPOs and the insolvency practitioner by ensuring payments are made to employees as soon as possible.

General enquiries may be directed to: redundancy.payments@insolvency.gsi.gov.uk

42. Redundancy Payments Service - new claims handling system

As you may be aware the Redundancy Payments Service (‘RPS’) has been developing a new claims handling system known as CHAMP (Claims Handling and Making Payments). The project team has had a number of meetings with the Employment Rights Act Committee (‘ERAC’), which is an organisation that represents insolvency practitioners’ staff involved in dealing with employee claims under the Employment Rights Act 1996.

The aim of these meetings is to try to ensure that the system meets the requirements not only of the RPS but also that it will be fit for insolvency practitioners’ purposes.

CHAMP will completely change the way we work bringing efficiency savings and improved customer service. The expected "Go Live" date is during the spring of 2010. This article lists some of the main changes CHAMP will bring for both RPS staff and insolvency practitioners, particularly those staff dealing with employee’s claims under the Employment Rights Act 1996.

In preparation, we are introducing new forms prior to go live; some of you may already have seen these via ERAC. This will enable RPS staff and insolvency practitioners to become familiar with them and old stock can be removed from circulation. We will be using OCR (Optical Character Recognition) technology to "read" the forms electronically, and therefore the layout of the forms needs to change so that there is enough space to answer the questions clearly and get the best possible results from the OCR process. This will reduce delays in processing claims because the new forms layout will ensure we have all the information we need in the right format. The new forms have been specially designed for the OCR process, and for that reason we can only accept original forms, not copies.

The RP1 claim form will become a more comprehensive document in thirteen parts over twelve pages and will include information relating to each question to help claimants to understand the claim process and enable them to complete the form more accurately. The forms are also in a format to optimise optical character recognition (OCR) when the form is scanned into CHAMP. It is intended that completed RP1 claim forms should be sent in the first instance to the insolvency practitioner and then to the RPS scanning centre. The RP2 and other forms such as the RP15 will follow a similar format.

The RP14 will also be in the new format but the content will be very similar to the current form, however the RP14A will be considerably different requiring more detailed data for each employee. For example you can enter details of up to four periods of Arrears of Pay, and up to three periods of Holiday Pay owed, where these are relevant. By collecting this information up front, we can reduce processing delays and verify claim entitlements. Initially this may seem like extra work but the process of submitting the information on line will

speed up the whole process for both insolvency practitioners and RPS and benefit employees, thus reducing phone calls. We are providing a facility for insolvency practitioners to upload a file into CHAMP containing the RP14A information which will avoid the need to re-enter it. We have been talking to software providers such as Turnkey with a view to them being able to generate this file automatically. The data from the forms will automatically be read by CHAMP and matched to the data from the RP1 and CHAMP will highlight any mismatches. One of the biggest changes is that we can only accept the RP14A handwritten on our pre-printed form, completed online or using the file transfer method. Insolvency practitioners will no longer be able to generate their own RP14A-like forms, as the OCR process will not be able to "read" the information unless our forms are used.

All documents, including claims will be scanned and filed electronically, the original paper documents will be destroyed and RPS staff will work from scanned images. The new process will enable RPS to submit claims to our finance office for payment throughout the day rather than in one pay file and we will be able to access calculation details prior to payment.

Another major difference will be that RPOs will no longer have geographical boundaries. We will retain four operational units in Watford, Edinburgh and two in Birmingham but each office will deal with claims from across the country. Thus all insolvency practitioners will deal with RPS staff in all four locations. When you submit an RP14 you will be told which RPO the case has been allocated to.

We will retain our team of inspectors who will continue to carry out random checks of wage records and additional enquiries as required. Under CHAMP, as the process is more automated the level of routine checking will be increased.

In February 2010 we will be delivering a series of presentations around the country to give insolvency practitioners and their staff a more detailed overview of the changes with the opportunity to ask questions. The proposed dates and locations are :

Birmingham Wednesday 3^rd February (confirmed)

Bristol Wednesday 10^th February

Manchester Wednesday 17^th February (confirmed)

Edinburgh Wednesday 24^th February (confirmed)

London Wednesday 3^rd March (confirmed)

Norwich Wednesday 10^th March

Final confirmation of the dates and locations will be issued early in the New Year along with invitations.

Any enquiries regarding this article should be directed towards
Susan Larkin, Redundancy Payments Service, Cobalt Square, 83 – 85 Hagley Road, Edgbaston, Birmingham B16 8QG . Telephone: 0121 678 1801

Email: susan.larkin@insolvency.gsi.gov.uk

General enquiries may be directed to: redundancy.payments@insolvency.gsi.gov.uk

43. Memorandum of Understanding between R3, Jobcentre Plus and The Insolvency Service

To assist employees facing the prospect of redundancy, a Memorandum of Understanding (MOU) was signed by R3, Jobcentre Plus and The Insolvency Service on 22 October 2009. The background to the development of the MOU and the adoption of a partnership approach was discussed in a previous edition of Dear IP (Issue No 40, July 2009; Chapter 11 Employment Issues, Article 38). The MOU is published on the Insolvency Service’s website at the link below:

http://www.insolvency.gov.uk/insolvencyprofessionandlegislation/iparea/JCP-R3-IS%20MoU%2022nd%20Oct%2009.pdf

The MOU outlines how insolvency practitioners dealing with struggling businesses should work with Jobcentre Plus to enable them to act quickly to support individuals affected by redundancy. This will help to ensure that those affected are given rapid access to information and services that will assist them to identify new job opportunities, get access to training, or to claim benefits.

Jim Knight MP, the Employment Minister, in commenting on the MOU stated: “It is important that we don’t wait for someone to lose their job before we start to help them. The pre-redundancy service Jobcentre Plus offers has helped thousands of people to get new jobs quickly – stopping a short term difficulty becoming a long-term problem.”

An operational delivery plan - which underpins the MOU - was also agreed by the three parties. At the first of the quarterly reviews of this plan in January, there were concerns about the level of compliance by insolvency practitioners. Although the MOU is voluntary, it is vital that insolvency practitioners abide by its principles as a failure to do so is likely to have a detrimental impact on affected employees.

Any enquiries regarding this article should be directed towards Steve Lamb, IP Policy Section, 21 Bloomsbury Street, London WC1B 3QW. Telephone: 020 7637 6698, email: steve.lamb@insolvency.gsi.gov.uk

General enquiries may be directed to IPPolicy.section@insolvency.gsi.gov.uk Telephone: 0207 291 6772