IOD calls for Paramount protection
Saturday 18 March 1995
The IOD said the problem stemmed from "bad legislative drafting" of the insolvency laws. "Business is getting very tired of bad legislative drafting and the costs should fall on the Government, which made the mistakes in the first place."
The IOD's call came as Michael Heseltine, President of the Board of Trade, came under increasing pressure to pass retrospective legislation to save receivers from compensation claims by ex-employees sacked when their companies were wound up.
One source close to the Department of Trade and Industry said that the department's first reaction to the Law Lords' controversial ruling on Thursday was to "dig their heels in."
Thursday's judgment will make receivers and administrators liable for the severance pay and pensions contributions of employees kept on for more than 14 days following a company going bust.
Receivers can do what they like within a fortnight of taking control, but employees who escape the sack during that period are deemed to have had their contracts and pension entitlements "adopted."
Mr Heseltine passed emergency legislation a year ago saving receivers from these problems. But this week's ruling means they face action over cases occurring before March 1994 - unless the DTI makes last year's bill retrospective.
A source close to the DTI said yesterday: "There is immense Civil Service opposition to retrospective legislation. It is seen as being not constitutional. It's OK if the courts make something retrospective, as with Paramount, but not if Parliament does so."
A spokeswoman for the DTI said: "We only had the Paramount ruling 24 hours ago. There are a lot of implications for a lot of people. We have invited representations from all intersted parties. We haven't had time to form a view yet. "
Receivers were holding their breath yesterday for multi-million pound claims from directors of bust companies - the most outlandish rumour being that the estate of the late Robert Maxwell may put in a claim.
The publishing tycoon had a multi-million pound service contract which the trustees may seek to enforce, one senior receiver suggested yesterday.
- 1 Lego breaks out of the toy box and heads for the gallery
- 2 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 3 Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
- 4 Tyler, The Creator says having new U2 album automatically downloaded on his iPhone was 'like waking up with herpes'
- 5 Grandmas keep accidentally tagging themselves as Grandmaster Flash on Facebook
David Haines remembered: Death of British hostage executed by Isis lamented from the Balkans to Sudan
Jennifer Lawrence and Kate Upton nude pictures exhibition cancelled after artist concedes photos were 'stolen property'
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Piers Morgan attempts to save the Union by promising to go back to the US if Scotland votes 'No' to independence
Jennifer Lawrence to make public appearance after nude photo leaks as Met Gala Ball 2015 co-host
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
George Galloway on Scottish independence: The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
Scottish independence: Britain faces 'constitutional crisis' at next election
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
iJobs Money & Business
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...