Labour Research April 2002

Features: Law queries

Law queries

* Under what circumstances can a receiver plead special circumstances thereby absolving them or the Secretary of State from paying compensation for lack of consultation prior to redundancies?

The only circumstance where the duty to consult would be avoided is where the events leading to the insolvency were unforeseen. The Court of Appeal has held that insolvency itself is not a "special circumstance" that negates the duty to consult.

It noted that insolvency could hardly be described as something out of the ordinary since it happens quite regularly. It would only be where a sudden unexpected event led to the insolvency or there is a financial crisis that sends a company suddenly into insolvency that the special circumstance defense is appropriate.

More information: Clarks of Hove v Bakers Union [1978] IRLR 366