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Employee factor will influence business turnaround

Publish date: 07 March 2018
Issue Number: 226
Diary: Legalbrief Workplace
Category: General

The UK's relatively inflexible employment law regime has always been a major consideration for turnaround professionals seeking to deal with a business in distress. But, write Neil Black, employment expert and Dawn Allen, restructuring expert at law firm Pinsent Masons in an report, 2017 saw significant developments in employment law favouring the employee, reinforcing the need for investors and potential purchasers to carefully evaluate the employee position as part of their due diligence process. They write that anyone looking at purchasing a business in distress should review its practices on holiday pay because court rulings in recent years have increased companies' liabilities. And anyone looking at a business that uses significant numbers of self-employed consultants should carefully take stock of those arrangements to determine if they would stand up to scrutiny in the event that the individuals or revenue officials seek to challenge the legitimacy of the same. Also, Black and Allen write, the abolition of employment tribunal fees has resulted in a significant increase in employment tribunal claims. This, they write, is likely to impact the turnaround profession in as much as it increases the risk of claims from disgruntled employees who may feel that their employment rights have not been respected.

Full report