A recent English law case has highlighted an issue relevant to those involved in Channel Islands-related insolvencies – and particularly to insolvency practitioners ("IPs") who take on appointments as administrators – about the interplay between insolvency legislation and employment law.

Although the underlying UK statutes are not directly relevant to practitioners in Jersey and Guernsey, it is a good reminder that a number of different employment law issues can arise where insolvency practitioners are appointed in respect of trading companies and have to take decisions about potential redundancies.

The risks are not abstract – procedural mistakes in the management of redundancy exercises can lead to liabilities not just for the company but also for the insolvency officeholders on a personal basis.

Guernsey and Jersey employment law are highly specialised areas of practise and insolvency practitioners would be well advised to seek early employment law advice, in addition to advice on insolvency law, to avoid making similar mistakes.

The English case

In summary, the English case R (on the application of Palmer) v Northern Derbyshire Magistrates' Court [2021] EWHC 3013 held that an insolvency practitioner acting as an administrator of a company can be found criminally liable under English employment law for failing to notify the UK government about proposed redundancies.

The IP had taken on the appointment in respect of West Coast Capital, which went into administration on...

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