Transfer of undertakings: the tension between business rescue and employment protection in corporate insolvency

Where a business becomes insolvent and its rescue is predicated on a going concern sale or transfer to another employer, there is a tension between employee protection and the rescue of insolvent but viable businesses. There is a consensus that employees deserve protection when the business that employs them becomes insolvent and is transferred to another employer on a going concern basis, yet extensive levels of employee protection can jeopardise going concern business sales by increasing the level of liabilities assumed by the purchaser. Business rescue and employee protection goals of insolvency law and employment law respectively are not inevitably incompatible. Opinions are divided, however, on the best means for achieving compatibility. This thesis uses theory to establish how the tension between these goals may be addressed. There is a perception that the European-derived provisions concerning the protection of employees’ rights, in the context of insolvent business transfers, are inimical to the rescue culture in the United Kingdom. While the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) are necessary in ensuring that employees’ rights are not walked over during transfers of insolvent businesses, it is equally important that policy makers take into account the fact that the rescue and continuity of such businesses would yield a better result for the employees, in terms of job security, than would be the case if they are liquidated.

Name dc:type.qualificationname

phd

Level dc:type.qualificationlevel

doctoral

Grantor dc:publisher.institution

Nottingham Trent University

Year dc:date.issued

2012

Author dc:creator

• Etukakpan, SE

Language dc:language

en