New employment rights and their effects on insolvent business

It has been predicted that the value of going-concern business sales and distributions to non-preferential creditors may be reduced if the new employment rights bill passes.

The Government published its employment rights bill at the beginning of October, among the proposed changes are the abolition of the two-year qualifying period for employees to claim unfair dismissal, guaranteed hours for zero-hour contract workers and strengthened sick pay, parental leave and leave rights.

Suzanne states that: “The right to protection from unfair dismissal from day one of employment means that a greater number of employees will have the ability to bring unfair dismissal claims against a buyer if they are dismissed around the time of sale. Additionally, more employees transferring will have non-zero-rated contracts offering them guaranteed hours and pay,”

Providing further explanation and comment on the Labour Party’s changes to Employment rights; R3 have published an article including the comments of Spencer West Restructuring and Insolvency Partner, Suzanne Brooker.

Read the full articles here: New Employment Rights ‘will reduce value of and distributions from insolvent businesses’ | R3