UK Trade Union Slams Loophole In New Insolvency Law

by Robin Pilgrim, LawAndTax-News.com, London

15 September 2003

The UK's Transport and General Workers' Union (T&G) has criticised the government's new insolvency laws, set to come into force later this month, and has urged an overhaul.

At the recent TUC conference in Brighton, general secretary of the T&G, Sir Bill Morris announced that the government has left open a loophole which will allow businesses facing financial problems to voluntarily liquidate, then reacquire their assets and begin trading again under a different name.

According to reports, Sir Bill cited as an example of the Friction Dynamex case, in which the firm in question was ordered by an employment tribunal to compensate union members sacked for striking, but put itself into voluntary liquidation.

According to a statement released by the union on the case in late August: 'It has emerged that the company who bought out the business, called “Dynamex Friction Limited”, has close links with former owner Craig Smith, who along with his family own the land, plant and machinery.'

Speaking on Monday, Sir Bill told TUC delegates that: 'If that's not justification for fundamental reform of the law on insolvency then, what is?'

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