The Dock Work (Compensation Payments Scheme) Regulations 1989

Insolvent employer

9.—(1) Where an employee claims that his employer is liable to pay him compensation and that the employer is insolvent and that the whole or part of the compensation remains unpaid, the employee may apply to the Secretary of State for a payment under this regulation.

(2) If on an application under this paragraph the Secretary of State is satisfied–

(a)that the employee is entitled to a compensation payment; and

(b)that the remaining conditions specified in sub-paragraph (1) are fulfilled;

the Secretary of State shall pay to the employee a sum calculated in accordance with paragraph 6 reduced by so much (if any) of the compensation payment as has been paid.

(3) Where the Secretary of State pays a sum to an employee in respect of a compensation payment–

(a)all rights and remedies of the employee with respect to the employer’s payment, or (if the Secretary of State has paid only part of it) all his rights and remedies with respect to that part of the employer’s payment, shall be transferred to and vest in the Secretary of State; and

(b)any decision of an industrial tribunal requiring the employer’s payment to be paid to the employee shall have effect as if it required that payment, or, as the case may be, that part of it which the Secretary of State has paid, to be paid to the Secretary of State.

(4) For the purposes of this paragraph an employer shall be taken to be insolvent if–

(a)he has become bankrupt or has made a composition or arrangement with his creditors; or

(b)he has died and his estate falls to be administered in accordance with an order under section 421 of the Insolvency Act 1986(1); or

(c)where the employer is a company, a winding-up order or an administration order has been made with respect to it or a resolution for voluntary winding-up has been passed with respect to it, or a receiver or manager of its undertaking has been duly appointed, or possession has been taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the company comprised in or subject to the charge or a composition or scheme proposed for the purposes of Chapter II of Part II of the Insolvency Act 1985(2);

(5) In the application of this paragraph to Scotland, for sub-paragraphs (4)(a), (b) and (c) above there shall be substituted the following sub-paragraphs:–

(a)an award of sequestration has been made on his estate, or he has executed a trust deed for his creditors or entered into a composition contract or in the case of a deceased debtor, alternatively a judicial factor has been appointed under section 11A of the Judicial Factors (Scotland) Act 1889(3);

(b)where the employer is a company, a winding-up order has been made or a resolution for voluntary winding-up has been passed with respect to it or a receiver of its undertaking has been duly appointed.

(6) Where an employer has become insolvent and an employee makes an application to the Secretary of State under sub-paragraph (1), the Secretary of State shall have the like powers as he has under paragraph 8 in the circumstances there mentioned but, for the purposes hereof, any reference in that paragraph to the employer shall include a reference to an officer appointed in connection with the employer’s insolvency, that is to say–

• a trustee in bankruptcy;

• an interim or permanent trustee in sequestration;

• a judicial factor appointed under section 11A of the Judicial Factors (Scotland) Act 1889;

• an administrator, a liquidator, a receiver or manager, or a trustee under composition or arrangement between the employer or his creditors or under a trust deed for his creditors executed by the employer; and “trustee”, in relation to a composition or arrangement, includes the supervisor of a voluntary arrangement proposed for the purposes of, and approved under, Part I or VIII of the Insolvency Act 1986.