Company avoids Sexual Discrimination claim by going into administration

Company avoids Sexual Discrimination claim by...

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An article appeared in last Saturday's Daily Mail reporting that a company went into administration only to start up again with a "similar" trade and name. The old company had a claim for sexual discrimination awarded against it and had been waiting for a final hearing to determine the quantum. As a result of the company's action the appellant may now not have anything to claim against.

Is this a legal loophole?

Clive Briggs

Replies (5)

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By Ken Howard
31st Oct 2005 20:04

Insurance?
Would the compensation claim not be met out of employer's liability insurance anyway, whether or not the company was still in existence?

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By neileg
01st Nov 2005 13:25

Not new
Creating a phoenix company is hardly a new approach and there's nothing special about awards for discrimination that makes this way of avoiding liability any different.

If the award was against the director, rather than the company, this ploy won't work.

Neil W raises the issue of TUPE. It's true that there may be a transfer of employment rights, but having had an award made against the employer at the time, I don't think TUPE gives any rights to recover the award from the new employer. Ironically, if the award hadn't been made, then the new co probably would have been liable.

To come back to Clives last question, it's not exactly a loophole, it's the effect of limited liability.

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the sea otter
By memyself-eye
31st Oct 2005 16:16

Loophole?
More likely the company had no funds to either fight the case or pay up in the event they lost.
Better to liquidate it now than battle with (and lose to) the tribunal.

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By NeilW
31st Oct 2005 20:09

TUPE
It may be possible to reapply to the employment tribunal or a higher court and request that the employment contract be reinstated as well as an award of damages. That would then activate TUPE.

I can't see the courts being that enamoured with somebody who tries to avoid their will.

NeilW

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By Tosie
31st Oct 2005 20:34

use of similiar name
The new co has made a mistake if as the
article states it is using a similar name
to original name.There is something in Co
Law wherby directors can be held
personally liable for debts

I am surprised that our insolvency friends
have not rushed in to explain the specifics,
whcih I regret to say I have forgotten.

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