Palmer, R (on the application of) v Northern Derbyshire Magistrates' Court & Anor [2023] UKSC 38 (01 November 2023)
Citation:Palmer, R (on the application of) v Northern Derbyshire Magistrates' Court & Anor [2023] UKSC 38 (01 November 2023)
Rule of thumb: Stare-decisis: If an administrator sacks more than 20 employees without providing 45 days’ notice, is this a crime? No, this is only a statutory crime if it is done by officers of the company, but an administrator is not an ‘officer of the company’ by technical definition, so this is not a statutory crime.
Background facts: The basic facts of this case were that a clothes shop, West Coast Ltd, trading as USC, which was a branch of Sports Direct, went into administration. Mr Palmer was appointed as the administrator responsible for employees. More than 20 employees were sacked en masse by Mr Palmer. Mr Palmer was prosecuted as if more than 20 employees are being sacked at the one time then the employees have to be given at least 45 days of notice of this so that they can get legal representation.
Parties argued: Both parties agreed that this case hinged on whether or not an ‘officer of the company’ included an administrator like Mr Palmer, with this definition determining whether the statutory offence he was accused of committing did or did not apply to him.
Court held: After careful consideration the Court decided that the title ‘officers of the company’ as described by the Insolvency Act 1986 did not apply to ‘administrators’ appointed by the Court, with them affirmed to be of a different title with the 1991 TULRA not applying to them. Mr Palmer was therefore declared as not guilty of a criminal offence.
Ratio-decidendi:
'1. ‘The issue on this appeal is whether an administrator of a company appointed under the Insolvency Act 1986 (“the IA 1986”) is an “officer” of the company within the meaning of the phrase “any director, manager, secretary or similar officer of the body corporate”, as used in section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”).
2. The statutory context in which this issue arises is that part of TULRCA which imposes duties on employers who are proposing to make employees redundant.
3. There is a duty to consult appropriate representatives of the affected employees where the proposal is to make 20 or more employees redundant within a period of 90 days or less: section 188(1). The consultation must commence at least 45 days before the first dismissal takes effect, where 100 or more employees are to be made redundant, and at least 30 days in other cases: section 188(1A). Where there are “special circumstances which render it not reasonably practicable to comply with” these requirements, “the employer shall take all such steps towards compliance with that requirement as are reasonably practicable in those circumstances”: section 188(7). Employment tribunals may make protective awards of remuneration in the event of a failure to comply with these requirements: section 189…
50. In my judgment, this functional approach to the meaning of a “similar officer of the body corporate” is not borne out either by the language of the provision or its context. There are a number of reasons for this…
55. What then is meant by an “officer” of the body corporate in the context of a provision such as section 194? In my judgment, the answer is tolerably clear. It is essentially a constitutional test. Does the person hold an office within the constitutional structure of the body corporate, as is the case with directors, managers and secretaries? That is the normal meaning of an officer of a company or other institution, and the normal meaning is emphasised by the prior reference to directors, managers and secretaries, all of whom are officers in the conventional sense, together for good measure with the words “other similar” before “officers”. It is possible, but generally unlikely that registered companies will have other types of officer, but a “body corporate” may take many forms - statutory companies, bodies incorporated by royal charter (which include a wide variety of educational, charitable and other not for profit organisations, as well as a small number of older commercial concerns) and foreign bodies corporate. The officers of these bodies will have a wide variety of titles and functions, and those who are similar to directors, managers and secretaries will be potentially liable under section 194(3). The director of roads of a local authority has been held to be an officer for the purposes of a similar provision in the Health and Safety at Work etc Act 1974: Armour v Skeen 1977 SLT 71.
56. For the reasons given above, an administrator of a company appointed under the IA 1986 is not in my judgment an “officer” of the company within the meaning of section 194(3) TULRCA. I would allow the appeal and quash the decision of the District Judge in the Northern Derbyshire Magistrates Court dated 29 May 2018 that Mr Palmer as the administrator of USC was an officer of USC within the meaning of section 194(3) of TULRCA’.
Lord Richards
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