Administrations

It is now settled law that TUPE applies to transfer employment contracts and employment liabilities to the new employer in all insolvent administrations, including so-called “pre-pack” administrations. TUPE applies in its modified form, allowing the administrator the limited freedom to change terms and conditions. This was decided in Key2Law (Surrey) LLP v De’Antiquis [2011] EWCA Civ 1567, OTG Ltd v Barke and Others [2011] UKEAT0320/09/1662).

This means that where an administrator sells an insolvent business as a going concern, the employees of that business will transfer to the buyer. It will have limited scope to make changes to terms and conditions as explained above and must carry out any redundancies. The national insurance fund will be responsible for certain employee liabilities owed by the insolvent employer prior to the transfer, on the basis described above.