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20/11/2015

Government response to consultation on redundancy and insolvency ‘does not provide the workable solutions needed’ – R3

Commenting on the government’s response to its own call for evidence on consulting on redundancies in insolvencies, insolvency trade body R3’s president Phillip Sykes says:

“The government’s response does not provide the workable solutions on this issue we were hoping to see at this point, although a way forward may be found by the promised discussions next year.”

“We are pleased the government is taking concerns on board. However, we need to start working on solutions now, not next year. This is an issue that is affecting business and job rescue today.”

“Clarity is needed about what needs to be done in an insolvency situation when jobs are at risk, and how directors and insolvency practitioners can comply properly with both employment and insolvency law.”

“We are not any further on than where we were when the call for evidence went out in March. The ‘emerging issues’ set out in the government’s summary are issues that the insolvency profession has tried to draw attention to for years.”

“There is a growing concern in the profession that uncertainty over redundancy consultation requirements and their timing in insolvencies risks reducing the number of business rescues and increasing the number of liquidations instead.”

“The insolvency profession has first-hand experience of the difficulties caused trying to comply with both insolvency and redundancy consultation requirements, which are sometimes at odds. We have made a series of proposals for reform to government over a number of years, including simplified reporting requirements. We want these to be adopted.”

“We recognise the government is in a difficult position in trying to reconcile European employment law with UK insolvency law, but insolvency practitioners are in an equally tight spot.”

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. Contact the press office, or see www.r3.org.uk for further information.

  • R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.