8. Conclusiones y líneas futuras 105
4.1. Parámetros de la petición de observación
The first role that employees have after the administrator has been appointed concerns the statement of the company’s affairs. The administrator may request one or more relevant persons to provide him with a statement of the company’s affairs.172 The term “relevant person” is defined and this is where the first direct reference to an employee is found.173 This means that an employee has a direct right to provide the administrator with a statement of the
166 Par 46(2)(b) of Schedule B1 of the Insolvency Act 1986.
167 Par 46(3)(a) and (b).
168 Par 46(5) of Schedule B1 of the Insolvency Act 1986. The prescribed persons according to rule 2.27(2) are any receiver or administrative receiver; the petitioner under any pending winding-up petition, and any provisional liquidator; any sheriff charged with execution of legal proceedings against the company; any person who has distrained against the company or its property; and the supervisor of any creditors’ voluntary administration.
169 See chapter 3 par 3.2.2.
170 See chapter 2 par 3.2.
171 Recommendations are made in chapter 5 par 3.1.2 regarding methods for making information available to affected persons during business rescue that will not compromise the time of the business rescue practitioner.
172 Par 47 of Schedule B1 of the Insolvency Act 1986. Par 47(2) sets out the particulars that must be contained in the statement of company affairs, which include information regarding the property, debts and liabilities of the company.
173 Par 47(3) of Schedule B1 of the Insolvency Act 1986 defines “relevant person” as (a) a person who is or has been an officer of the company; (b) a person who was part of the formation of the company during the period of one year ending with the date on which the company enters administration; (c) an employee of the company during that period; and (d) a person who is or has been an officer or employee of the company during that year.
company’s affairs.174 The capacity of an employee is qualified as it is stated that the reference to employment is a reference to an employment contract or a contract of services.175
The administrator must prepare a statement containing his proposals and indicating how he will achieve the purpose of the administration.176 These proposals are presented at the initial meeting of creditors which must be convened within 10 weeks from the day on which the company entered administration.177
The administrator must present a copy of the statement containing his proposals to the initial creditors’ meeting.178 The administrator’s proposals may be approved without changes179 or with changes consented to by the administrator.180 Approval of such proposals takes place by majority in value of the creditors voting at the meeting.181 Where no quorum was present and approval of the proposals could not be made, the administrator may approach the court for approval. Rule 2.33(5) deals with instances where proposals are deemed to be approved and it appears that if there is no objection to a proposal it will be deemed to be approved.182
The administrator’s proposals may also be revised.183 Paragraph 68(1)(b) gives the administrator a discretion that allows him to make non-substantial revisions to the proposals.184 If the administrator wishes to revise substantial parts of the proposal, the same procedure as that in respect of the initial approval has to be followed.185 If a revision of the
174 Par 47(1) of Schedule B1 of the Insolvency Act 1986.
175 Par 47(4) of Schedule B1 of the Insolvency Act 1986; see further in this regard Sealy and Milman Annotated Guide 550 who state that the use of “employee” in par 47(3) and (4) may include a wide definition of the term which could refer to professionals such as auditors or bankers of the company as well.
176 Par 49 of Schedule B1 of the Insolvency Act 1986; see also rule 2.33(2) for further requirements regarding the contents of the proposal.
177 Par 51 of Schedule B1 of the Insolvency Act 1986.
178 Par 51(3) of Schedule B1 of the Insolvency Act 1986.
179 Par 53(1)(a) of Schedule B1 of the Insolvency Act 1986.
180 Par 53(1)(b) of Schedule B1 of the Insolvency Act 1986.
181 Insolvency Rules 2016 Rule 15.34(1).
182 Insolvency Rules 1986 of the Insolvency Act 1986. In BTR (UK) Limited, Lavin v Swindell [2012] EWHC 2398 (Ch) Cooke HHJ remarked that if there is no dispute regarding the administrator’s proposals, neither the creditors nor the court need to approve them to enable the administrator to continue with its functions. The only proposal that does need actual approval by creditors or by the court is a proposal regarding the remuneration of the administrator. Rule 55(1) deals with the failure to obtain approval of proposals and Rule 55(2) regulates the court’s discretionary powers in such a case.
183 Par 54 of Schedule B1 of the Insolvency Act 1986.
184 Fletcher Law of Insolvency 16-076, 535.
185 Par 54 of Schedule B1 of the Insolvency Act 1986.
administrator’s proposals becomes necessary, the administrator must call a creditors’
meeting, send a statement of the proposed revisions with the notice of the meeting to all creditors, send a copy of the statement to each member of the company and present a copy of the statement at the creditors’ meeting.186
The meeting has the power to approve the statement without any changes or with changes consented to by the administrator.187 The creditors’ meeting may approve the revised proposals with or without changes.188
Apart from an employee’s right (and obligation) to provide the administrator with a statement of the company’s affairs, no real participation rights are given to employees during administration in England. Employees in South Africa also play a limited role during the consultation in a business rescue proceeding.189 In contrast, employees in Australia play an active role in committees of inspection which have influential power when it comes to monitoring, directing and advising the administrator during a company’s voluntary administration.190
3.4 Employee’s right to be present at meetings and vote during administration proceedings
No specific mention is made of an employee’s right to be present at meetings and to vote during administration proceedings. Only employees who qualify as creditors of the company will have the right to be present at meetings and to vote in their capacity as creditors.191 The position in England and in Australia is very similar.
186 Par 54(2) of Schedule B1 of the Insolvency Act 1986.
187 Par 54(2)(d) and 54(5)(a) and (b) of Schedule B1 of the Insolvency Act 1986.
188 Par 54(4) of Schedule B1 of the Insolvency Act 1986.
189 See chapter 2 par 3.3
190 See chapter 3 par 3.2.3. This improvement of the position in Australia was only recently introduced by the Insolvency Law Reform Act of 2016. Prior to that, employees in England and Australia were ignored when it came to the right to take part in consultations.
191 Employees in South Africa do have a right to be present at meetings. They even have the right to make submissions before the creditors vote on the business rescue plan. These rights are extraordinary as they are conferred upon employees not in their capacity as creditors of the company, but in their capacity as employees.
No equivalent right is to be found in either England or Australia. See chapter 2 par 3.5.