Pre-packed Administrations: An Empirical Social Rights Analysis

Abstract

Abstract This article considers the relationship between worker protection legislation and pre-packed administrations: the sale of a business or assets of a failing company negotiated in principle prior to the initiation of formal insolvency proceedings and effected immediately after entry into such proceedings by the insolvency practitioner appointed to administer them. The author seeks to explain pre-packs’ significance for British employment law and evaluate how employment law should respond. The findings of a qualitative empirical study on the use of ‘high-end pre-pack administrations’ are presented along with a consideration of institutional treatment of pre-packs to date and an analysis of the legal nature of transactions effected by pre-pack under the applicable insolvency laws. The article argues that the focus of labour law doctrinal discussion in this area to date has been misplaced and that the focus of the labour law debate now needs to shift to how employees are protected in a restructuring environment where management and senior creditors are concerned with restructuring debt rather than with labour issues, and where the Transfer of Undertakings (Protection of Employment) Regulations may have only limited application.