Carr v British International Helicopters Ltd
| Jurisdiction | UK Non-devolved |
| Date | 1993 |
| Court | Employment Appeal Tribunal |
Industrial Relations - Industrial tribunals - Complaint - Employers in administration - Complaint of unfair dismissal - Whether “other proceedings” - Whether requiring administrator's consent or leave of court - Whether complaint in absence of consent or leave nullity -
The respondent company became insolvent and administrators were appointed who controlled the company while a buyer was sought. Following the loss of contracts and a decline in work, a number of staff including the applicant were made redundant. On the applicant's complaint of unfair dismissal an industrial tribunal considered as a preliminary issue whether the tribunal had no jurisdiction to hear the claim on the ground that the applicant was in breach of the requirements of section 11(3)(d) of the Insolvency Act 1986,F1 in that he had failed to obtain the leave of the administrators or of the court before bringing proceedings against the company. The tribunal found that an application to an industrial tribunal constituted “proceedings” within the meaning of section 11(3)(d), that the applicant should have obtained the administrators' consent or leave of the court and that the claim was therefore a nullity.
On the applicant's appeal: —
Held, allowing the appeal, that, although the tribunal had correctly held that complaints and applications to an industrial tribunal came within the words “other proceedings” in section 11(3)(d) of the Insolvency Act 1986 and were subject to the conditions and limitations laid down by that section, an application made to a tribunal without the prior consent required by section 11 was not a nullity; and that the appropriate course would have been for the industrial tribunal to sist the application to allow the applicant an opportunity to apply for leave for the proceedings to be brought (post, pp. 27E, 28A–B, 30E–G, 31D–E).
The following cases are referred to in the judgment:
Air Ecosse Ltd. v. Civil Aviation Authority [
Atlantic Computer Systems Plc., In re [
Jones v. Secretary of State for Employment [
M.S.F. v. Parkfield Castings (in Liquidation) (unreported), 14 April 1992, industrial tribunal.
Quazi v. Quazi [
Ronex Properties Ltd. v. John Laing Construction Ltd. [
Transport & General Workers' Union v. Howard Rotovators (unreported), 21 October 1987,
Wilson v. Banner Scaffolding Ltd.,
No additional cases were cited in argument.
Interlocutory appeal from an industrial tribunal sitting at Aberdeen.
The applicant, Kenneth Carr, made a complaint of unfair dismissal on the ground that he had been unfairly selected for redundancy by his employers, British International Helicopters Ltd. By a decision sent to the parties on 3 March 1993 the complaint was dismissed as incompetent. The applicant appealed on the ground that the industrial tribunal had misdirected themselves in law in holding that the application came within the prohibition contained in section 11(3)(d) of the Insolvency Act 1986 and in holding that the application was covered by the term “other proceedings” in section 11(3)(d).
The facts are stated in the judgment.
The appeal was heard and judgment given by the Employment Appeal Tribunal sitting in Scotland.
G. C. Bell Q.C. for the applicant.
J. A. Peoples for the company.
29 September. The following judgment of the appeal tribunal was handed down.
Lord Coulsfield. This is an appeal against a decision of an industrial tribunal, dated 3 March 1993, by which the applicant's complaint that he had been unfairly selected for redundancy by the respondent company was dismissed as incompetent.
During 1991, the company were found to be insolvent and, on 12 December 1991, the High Court in England made an administration order and appointed administrators to the company. The company continued to trade while the administrators sought a buyer for it as a going concern. However, there was a reduction in work and certain contracts were lost and, following thereupon, on 31 July 1992, 62 staff, including the applicant, were made redundant. On 6 October 1992 there was a meeting to discuss the applicant's redundancy but by a letter dated 12 October 1992, which was not before the industrial tribunal, a representative of the administrators confirmed that the termination of the applicant's employment stood. The letter stated, inter alia, “I understand that you will wish to take this matter to an industrial tribunal.” The applicant's application was lodged with the industrial tribunal on 17 October 1992. The only remedy sought in the application was reinstatement. The company's notice of appearance, dated 9 November 1992, indicated that the company proposed to contest the application but, at that stage, no question of competency was raised. However, by letter dated 21 December 1992, it was intimated that the company proposed to contend that the application was incompetent, because the applicant had not obtained either the consent of the administrators or leave of the court, as required by section 11 of the Insolvency Act 1986, before raising the application. The hearing before the industrial tribunal, which took place on 12 February 1993, was a preliminary hearing concerned only with the question of competency.
It is convenient next to set out the relevant statutory provisions. Section 11(1) of the Insolvency Act 1986 provides that, on the making of an administration order, any petition for winding up of the company shall be dismissed, and any administrative receiver shall vacate office. Section 11(2) deals with the case of a receiver appointed to part of the company's property, and section 11(3) provides:
“During the period for which an administration order is in force — (a) no resolution may be passed or order made for the winding up of the company; (b) no administrative receiver of the company may be appointed; (c) no other steps may be taken to enforce any security over the company's property, or to repossess goods in the company's possession under any hire-purchase agreement, except with the consent of the administrator or the leave of the court, and subject (where the court gives leave) to such terms as the court may impose; and (d) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the consent of the administrator or the leave of the court and subject (where the court gives leave) to such terms as aforesaid.”
The question in the present case is whether a complaint to an industrial tribunal on the ground of unfair selection for redundancy falls under the description of “other proceedings,” within the meaning of section 11(3)(d) of the Act of 1986. It is therefore necessary to bear in mind the relevant provisions of the
“A complaint may be presented to an industrial tribunal against an employer by any person (in this Part referred to as the complainant) that he was unfairly dismissed by the employer.”
The remaining provisions of section 67 deal with questions of time limits for the presentation of complaints. Section 68, as amended by Schedule 3 to the
“(1) Where on a complaint under section 67 an industrial tribunal finds that the grounds of the complaint are well-founded, it shall explain to the complainant what orders for reinstatement or re-engagement may be made under section 69 and in what circumstances they may be made, and shall ask him whether he wishes the tribunal to make such an order, and if he does express such a wish the tribunal may make an order under section 69. (2) If on a complaint under section 67 the tribunal finds that the grounds of the complaint are well-founded and no order is made under section 69, the tribunal shall make an award of compensation for unfair dismissal, calculated in accordance with sections 72 to 76 to be paid by the employer to the employee.”
Section 69 provides that an order may be made either for reinstatement or re-engagement, upon such terms as the industrial tribunal may decide, and defines the effect of such orders. Section 70 contains provisions supplementary to section 69. Section 71 deals with the enforcement of an order under section 69 and with compensation and provides for compensation to be assessed and paid in cases in which an order for reinstatement or re-engagement has been made but not complied with and, in certain circumstances, for an additional award of compensation to be made in such a case. In the course of the debate in the present case, reference was also made to sections 106 and 108 of the Act of 1978. Section 106(1) provides:
“Where an employee claims that his employer is liable to pay to him an employer's payment, and either — (a) that the employee has taken all reasonable steps (other than legal proceedings) to recover the payment from the employer and that the employer has refused or failed to pay it, or has paid part of it and has refused or failed to pay the balance, or (b) that the employer is insolvent and that the whole or part of the payment remains unpaid, the employee may apply to the Secretary of State for a payment under this section.”
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