The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) imposes duties on employers who are proposing to dismiss at least 20 employees as redundant at one establishment within 90 days or less.  One such duty is to notify the Secretary of State at least 30 days before the first of those dismissals takes effect where between 20 and 99 such redundancies are proposed, or at least 45 days where 100 or more such redundancies are proposed (S193 TULRCA).  The notification must be in writing on a Form HR1 and must include certain proscribed information. 

An employer who fails to give notice in accordance with S193 TULRCA commits a criminal offence (S194(1) TULRCA).  Any director, manager, secretary or other similar officer of the body corporate can also be guilty of a criminal offence if that person consents to, connives in, or negligently fails to prevent the employer’s failure to give such notice (S194(3) TULRCA). 

R (on the application of Palmer) v Northern Derbyshire Magistrates’ Court and anor concerned an administrator of a company appointed under the Insolvency Act 1986 (IA 1986) who had failed to comply with S193 TULRCA (by giving the notice too late).  It fell, on appeal, to the Supreme Court to decide whether the IA administrator was an “officer” for the purposes of S194(3) TULRCA.

Neither TULRCA nor any other enactment defines “officer” for the purposes of S194(3) TULRCA, nor is there any clear statement in any authoritative case law (of which the Supreme Court was aware) which can be taken as a definition of what is generally understood to be an officer. The Supreme Court therefore considered:

  • The meaning of “officer” in the IA 1986.  The Supreme Court concluded that none of the references in the IA 1986 suggest that an administrator is an officer of a company in administration.  On the contrary, some of the references clearly show that an administrator is not considered to be an officer of a company (for example; in connection with company insolvency, S251 IA includes a definition of “officer” which does not expressly include administrators, and a procedure for misfeasance claims in a liquidation at S212 distinguishes between officers and administrators).
  • Previous authorities. The Supreme Court concluded for various reasons that these were wrongly decided.
  • The meaning of “officer” in S194(3) TULRCA.  The Supreme Court concluded that there was no convincing basis to give an extended meaning to “other similar officer” so as to capture an administrator appointed under IA 1986.  The appellant pointed out the difficulties that administrators faced in this situation.  Administrators will often need to act swiftly following their appointment to decide whether employees should be retained or made redundant and in any event will be taken to have adopted existing contracts of employment, which gives priority to the claims of employees over other creditors and the administrators costs and expenses, if the administrators continued existing contracts of employment for more than 14 days after their appointment.  As such administrators have the dilemma of either acting swiftly in the interests of achieving the statutory purposes of administration or complying with the notice requirements under S193 and S194 TULRCA.  Although the Supreme Court recognised this dilemma it was not sufficient for it to be an aid to the construction of S194 TULRCA.   Rather, the question should be a constitutional one; ‘Does the person hold an office within the constitutional structure of the body corporate, as is the case with directors, managers and secretaries?’  This is not the case in relation to IA administrators.

Against that background, the Supreme Court held that an administrator appointed under the IA 1986 is not an “officer” for the purposes of S194 TULRCA.   

It should be noted that although the case has determined that an administrator could not be criminally liable, this does not prevent the company and the administrator from being required to comply with the requirements in S193 TULRCA.

The full judgment can be found here: Palmer, R (on the application of) v Northern Derbyshire Magistrates’ Court & Anor [2023] UKSC 38 (01 November 2023) (bailii.org).    

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