Industrial Tribunals Northern Ireland Decisions

THE INDUSTRIAL TRIBUNALS

 

CASE REFS: 2790/16

2791/16

1782/17

 

 

 

CLAIMANTS: Graeme Leitch

Jacqueline Leitch

Alexandra Leitch

 

 

RESPONDENTS: 1. Ernest & Young LLP

2. Curran Court Hotel Ltd (in receivership)

 

 

 

DECISION ON A PRE-HEARING REVIEW

I decided not to "stay" any of these three industrial tribunal cases.

 

Constitution of Tribunal:

Employment Judge (sitting alone): Employment Judge Buggy

 

Appearances:

The relevant claimants were represented by Mr B Mulqueen, Barrister-at-Law, instructed by K J Morgan, Solicitor.

The respondent, Ernest & Young LLP was represented by Ms E Flannery, Solicitor.

The respondent, Curran Court Hotel Ltd ("the Old Company") was also represented by Ms Flannery.

 

REASONS

 

1. In these Reasons, the three claimants in these cases are referred to as "the relevant claimants".

 

2. Crawford Leitch and Jean Leitch were the individuals who were in control of the Old Company until July 2016, when that company went into administrative receivership.

 

3. Crawford Leitch and Jean Leitch are the parents of Graeme Leitch (a relevant claimant) and of Robert Leitch. Jacqueline Leitch (another relevant claimant) is married to Graeme Leitch. Alexandra Leitch (the third relevant claimant) is a grandchild of Crawford Leitch and Jean Leitch.

 

4. Each relevant claimant was an employee of the Old Company when the Old Company went into administrative receivership. Each relevant claimant continued to be employed by the Old Company after it went into receivership. Each relevant claimant was subsequently dismissed.

 

5. In each of these three cases, that claimant makes a complaint of unfair dismissal, in respect of that dismissal.

 

6. On 25 August 2017, in each of these three cases, I conducted a pre-hearing review. In each case, there were two issues:

 

(1) Should Ernest & Young LLP ("EY") be disjoined as a respondent?

 

(2) Should the industrial tribunal proceedings be "stayed" pending the outcome of certain High Court proceedings?

 

7. In each case, I decided that EY should be disjoined as a respondent. My written decision in respect of that disjoinder was issued on 21 September 2017. My written reasons for that disjoinder are set out at paragraphs 8 - 11 below.

 

8. As Ms Flannery pointed out, under an administrative receivership, any actions of the receiver are deemed to be acts of the relevant company. See Article 54(1)(a) of the Insolvency (Northern Ireland) Order 1989 ("the Insolvency Order").

 

9. In each of these cases, the claimant is making a claim of unfair dismissal. A claim of unfair dismissal can only be made against the employer.

 

10. When due account is taken of Section 39(2) of the Interpretation Act 1954, it is clear that Graeme Leitch and Jacqueline Leitch were dismissed within less than 14 days of the start of the receivership. Therefore, in each of those two cases, the receiver did not "adopt" the contract of employment.

 

11. In the Alexandra Leitch case, the Old Company continued to employ the claimant long after the expiration of a period of 14 days beginning on the date of the commencement of the receivership. Accordingly, in the Alexandra Leitch case, the receiver did "adopt" the relevant employment contract. However, even when a receiver "adopts" an employment contract in that context, he/she does not thereby become the employee's employer, and he/she does not replace the relevant corporate body (as the claimant's employer) and he/she does not become personally liable in respect of any unfair dismissal claim. (Unfair dismissal is not a "qualifying liability" within the meaning of Article 54 of the Insolvency Order. In that context, see Albion Automative Ltd v Shaw [EAT/523/94].)

 

12. In each of these three cases, the claimant asked me to "stay" his/her industrial tribunal proceedings pending the outcome of certain pending High Court proceedings ("the relevant High Court proceedings").

 

13. The relevant High Court proceedings are as follows:

 

(1) Administrative Receivers v Crawford Leitch and Jean Leitch (2017/4824);

 

(2) Ulster Bank Ltd v Graeme Leitch, Robert Leitch and Jean Leitch (2016/100507); and

 

(3) Ulster Bank Ltd v Graeme Leitch (2016/100566).

 

14. The proceedings referred to at sub-paragraph (2) of paragraph 13 above are proceedings which have been brought by Ulster Bank against Graeme Leitch (who is a relevant claimant), against Jean Leitch and against Robert Leitch.

 

15. The proceedings referred to at sub-paragraph (3) of paragraph 13 above are proceedings which have been brought solely against the claimant Graeme Leitch.

 

16. The proceedings referred to at sub-paragraphs (1), (2) and (3) of paragraph 13 are possession proceedings. I am sure that, during the course of those possession proceedings, the defendants to those proceedings will challenge the validity of the appointment of the administrative receivers.

 

17. However, as Ms Flannery has pointed out, Article 196 of the Insolvency Order makes clear that, notwithstanding any defect in the appointment of an administrative receiver, any acts carried out by that receiver are deemed to be valid.

 

18. In view of the provisions of Article 196 of the Insolvency Order (already referred to above) it seems to me to be unlikely that, in making a decision in any of these three cases, any industrial tribunal will need to arrive at a determination as to the validity of the appointment of the receivers in respect of the Old Company.

 

19. I thought it was unlikely that any industrial tribunal decision, in any one, or more, or all, of the relevant cases, would "embarrass" the High Court within the context of any one, or several, or all of the relevant High Court cases.

 

20. I noted that all of the sets of High Court proceedings which are referred to at paragraph 13 above are at a relatively early stage.

 

21. Against the background set out at paragraphs 12 - 20 above, and for the reasons which are set out in those paragraphs, I decided not to "stay" these proceedings.

 

 

 

 

 

 

 

Employment Judge

 

 

Date and place of hearing: 25 August 2017, Belfast

 

 

Date decision recorded in register and issued to parties: