July 22, 2008
Arfan Khan successful in insolvency Appeal. The Court of Appeal held that protective awards were debts provable in the liquidation.
The first instance judge had regarded himself as bound by Glenister v Rowe ([2000] Ch 76) and R (Steele) v Birmingham City Council ([2006] ICR 869). He held that the tribunal had a discretion not to make the awards, and therefore the awards were not provable. This was held to be the case even though it was submitted on behalf of the employees that the tribunal had no such discretion.
The appeal was allowed for two interlinked reasons: (i) as a matter of language, the liability to pay a protective award stemmed from the preliquidation breach of obligation, and (ii) given the complete breach of the obligation to consult, the employment tribunal realistically did not have a discretion to refuse an award. Under EC Directive 98/59, the tribunal was duty bound to make the awards. An employment law analysis of the case, based on Directive 98/59/EC and Susie Radin Ltd v GMB ([2004] ICR 893), provided a powerful basis upon which to distinguish both Glenister and Steele.
Arfan Khan appeared for the successful employee representative.