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THE REGULATORY REFORM (FIRE SAFETY) ORDER 2005 => Q & A => Topic started by: kurnal on December 13, 2011, 09:26:18 PM
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If a business goes bankrupt and a receiver is appointed and trys to keep the business going and find a buyer, many of the employment rights of staff can be affected.
Please can anyone define who is the RP under the Fire Safety Order during this time?
I cant seem to find any definitive answers online.
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Yawn---there already have been several cases of this arising , Big Al.
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Thanks so much for the helpful insight Col.
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Always na pleasure to help an old man in the twilight of his life.
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Come on Uncle Col...
Tis the season of goodwill to all men, including English men, and Derbycestershirians like 'Big Al'.
I would also like to find out how the "land lies" in respect of companies in receivership
So educate us Sir Col - if not for Big Al, how about for me - your bestest ever friend in the whole wide world. There could be some Talisker in it for you. ;) ;)
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We are often in this situation with some of our clients. The receiver appoints a Managing Agent to keep the place ticking over whilst a buyer is found.
The Agent appoints us and we are working for the Receiver c/o Acme Management Ltd.
The fire authority in the initial instance serve notice on the company secretary of the agent by virtue of the agent having day to day control and a fair amount of spending authority over the site.
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Thanks Anthony but I would suggest the Managing Agent is a person having control but would like to know who is the employer during the period of receivership or administration?
I am thinking in particular of articles 19 and 21.
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who pays the employees?
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I dont really know. I believe the company in administration pays the wages but only subject to the permission of the receiver to do so.
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I have been given the following advice from a good source.
"It will normally be the company in administration/receivership that is the employer. One of the texts we often refer to says the following:
"Who is the employer?
Subject to the following exception, the insolvency practitioner is merely the agent of the company and so the employer remains the insolvent company. However, in court-appointed receiverships over the undertaking of a company, the receiver is the principal of the company and so will become the employer of any employees that they choose to retain. "
On that point about court appointed receivers it says there are two categories:
A court appointed receiver of the company - the receiver is the agent of the company, and so not the employer
A court appointed receiver of the undertaking of the company - the receiver is the principal and if he retains employees he is the employer. By undertaking I think they mean the business - ie where the receiver is appointed over the business, rather than over the company that owns the business.
Does that make some sort of sense? There are a number of different types of insolvency procedure, but I think the point to take away is that whichever type it is, then apart from that one exception, the company is the employer."
Is that right Colin and in accord with what you already knew but did not wish to share with us?
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Thanks Kurnal. I was given a similar explanation recently, the exception being that your response seems to be based on a reliable source, whereas my version of events came from an 'arm chair lawyer' down the pub.
Intresting to note the difference made between the status of the "agent" and the "Prinicpal" Again my source claims that when the receiver acts as an agent he or she is solely employed to find a potential investor / buyer to rescue the troubled company, or wind it up if a buyer can't be found.
Whereas a receiver acting as Principle will effectively take over control of the business and its liabilities from the existing directors, and then try to turn the companies profits around (in other words the receiver may think the company could be profitable under their management, and that the company only failed because the previous directors were incompetent).
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Hi Midland. I was also sent a copy of a table explaining the different situations relating to orders of a court and will forward the whole comment to your email address if you wish.
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Kurnal it appears that there is a major difference between a company in administration and receivership check out http://www.becomingbankrupt.co.uk/going-into-receivership.html
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Hi Midland. I was also sent a copy of a table explaining the different situations relating to orders of a court and will forward the whole comment to your email address if you wish.
Thanks Kurnal - would appreciate that.
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This may help, or muddy the waters......
http://www.hse.gov.uk/enforce/enforcementguidesc/identifying/insolvency.htm
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Thanks Civvy though let us remember that the link is to the Scottish guidance and their Law is different to that in England and Wales.
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Doh!
http://www.hse.gov.uk/enforce/enforcementguide/investigation/identifying-insolvency.htm
That's better.
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Civvy can you use HSE guidance as the RR(FS)O says "the employer, if the workplace is to any extent under his control" there is no mention the employer has to have control in the HASAWA.
If the premises is in administration the Insolvency Practitioner (Accountant) is only an agent of the employer therefore the employer does have control. However if the premises is in receivership the official receiver can sack the employer so is the employer in control in that situation?
From the following link "before the receiver arrives at your company, because once they do, they have complete control over everything."
http://www.becomingbankrupt.co.uk/going-into-receivership.html
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I think you can, it seems to agree with much of what has been said:
Proceeding against the Receiver 62. It will not usually be appropriate to proceed against the receiver personally, though the terms of appointment may be so wide as to make the receiver a 'person in control' of premises for the purposes of s.4, HSWA. No proceedings against a receiver should be commenced without consulting the Legal Adviser's Office.
From that it seems that it depends on the terms of the appointment, so if the receiver takes over the entire running of the business then they may be responsible for ensuring staff training etc takes place, but if they are there simply to manage the financial affairs then the duty would still rest with the employer. If the receiver removes funding for such as H&S training / PPE then they are asserting control and I would say that elements of the person having control from both pieces of legislation would apply accordingly.
The public interest test is mentioned quite a lot, and I would assume that they are hinting that they would not bother wasting time prosecuting an employer who is in receivership due to the likelihood of just adding the debts or a minimal fine being issued, however if the receiver could be held accountable then the public interest test would not present much of a problem.
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Having looked more closely at the HSWA I stand corrected and accepts the two pieces of legislation have many similarities in this respect.
IMO the crux of the matter is identifying who is in control and because the bankruptcy legislation is so complicated the best person to assist you in identifying these persons would be the insolvency practitioner in charge of the premises you are dealing with. With this information using part 3 & 5 of the RR(FS)O you could identify the who the RP and any other persons in control are.