RESCUE BEFORE A FALL:AN ANGLO-FRENCH ANALYSIS OF THE BALANCE BETWEEN ...

312 Pages·2016·2.41 MB·English

R F : A -F
ESCUE BEFORE A ALL AN NGLO RENCH
A B C
NALYSIS OF THE ALANCE BETWEEN ORPORATE
R E P
ESCUE AND MPLOYMENT ROTECTION
Jennifer Leigh Longstreet Gant
BA MBA LLB(Hons) LLM

A thesis submitted in partial fulfilment of the requirements of
Nottingham Trent University for the degree of
Doctorate of Philosophy

January 2016
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ACKNOWLEDGEMENTS
Many have provided their support and encouragement while I have worked through this
mammoth piece of work. Firstly, I must give my sincerest thanks for my first mentor on
this path, Professor David Burdette. David first encouraged me to apply for the PhD
programme, supported me as my director of studies every step of the way, has boosted
my confidence, and helped me face my fears in ways I could never have imagined. I
could not imagine doing this without him on my team. Secondly, Professor Paul Omar
has challenged my assumptions, invited me to look beyond the black and white into the
web of influences on the law, included me in publication and project, and has become a
fast friend. I look forward to years of collaboration and engaging conversation with him.
Thirdly, Professor Rebecca Parry has provided a much needed voice of reason, assisting
me in the fine tuning of my PhD proposals and other similar work, while providing an in
depth knowledge of the intricate workings of academic life to help me put my best foot
forward in all things. These three wonderful people have made this entire thing possible.
I must also thank my family for the encouragement and pride that they have shown in
me, which has helped me to push through obstacles, though these were thankfully quite
few. I would also like to thank some of the greatest inspirations for engaging in this
journey: my late grandfather Dr James R. Longstreet, a PhD and Professor of Finance,
and my aunt, Dr Diane Longstreet, PhD in Medicine, Dietetics, and Nutrition, who beat
me to being the first lady Longstreet PhD in my family. I am proud to add my academic
achievement to the Longstreet legacy.
Finally, I must thank my husband, Nicholas Gant BEng, who has been tirelessly patient,
self-sacrificing, encouraging and supportive, while also providing a firm tether to keep
my head from floating off into the clouds. I could not have done this without him by my
side, even though this was often more of a metaphorical presence.
Thanks also to Professor Adrian Walters, Graham Ferris, Dr Alexandra Kastrinou,
Professor Rosalind Mason, Professor G Ray Warner, Professor Ian Fletcher, and
Associate Professor Jenny Buchan for your advice, references, awards, teaching, and
collaborative opportunities that have helped to jump-start my academic career.
To all, you have my most profound thanks.
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ABSTRACT
The financial crisis of 2007/8 has had a significant impact on the place of social policy
objectives in the Common Market. As laws have been reformed over the years since the
failure of Lehman Brothers1 set in motion a domino effect among high risk investment
banks and financial institutions throughout the economically advanced nations of this
world, both employment protection and corporate rescue have been found, at times, in
the spotlight. While the corporate rescue culture of the European Union2 promotes the
rehabilitation of businesses in financial distress in preference to liquidation where
possible, it also emphasises reducing unemployment and social exclusion.3 The social
implications of corporate rescue must therefore be considered, rather than taking a
purely economic approach, emphasising creditor wealth maximisation during insolvency
proceedings.4 EU social policy has generated a number of employment regulations, such
as the Acquired Rights Directive,5 which are arguably the greatest obstacle to promoting
corporate rescue. Thus there is an enduring conflict that subsists between the aims of
corporate rescue and employment protection regulation.
Substantial employment protection damages the effectiveness of corporate rescue by
deterring acquisitions in view of the potential liability attached to transferring
employees.6 Ineffective corporate rescue may then have an adverse effect on the
economy and job security due to increased company failures and job losses.7 Employees
attached to the sale of a business in a corporate rescue procedure can represent a
liability, reducing the intrinsic value of that business and potentially reducing the
number of businesses successfully rehabilitated through the use of corporate rescue
mechanisms. The obstruction to successful corporate rehabilitation represented by
employment protection must therefore be balanced with corporate rescue in order to
successfully promote the rescue culture. An examination of the approaches taken by
different jurisdictions, in this case the United Kingdom and France due to their
important influence in the EU as well as their archetypically different legal systems
should help elucidate how the tension could be managed in order to achieve a balance
between them.
The form of examination is particularly important if an effective reform is to be
introduced. As such, a comparative historical methodology concentrating on the path
dependent legal developments of both jurisdictions will be applied in order to discover
the fundamental historical, economic, social, political, and cultural differences between
the UK and France that have influenced their approaches to social policy and corporate
insolvency law. Legal developments cannot be explained by examining a legal rule in

1 See The Economist “The Origins of the Financial Crisis: Crash Course” (7 September 2013)
<http://www.economist.com/news/schoolsbrief/21584534-effects-financial-crisis-are-still-being-felt-five-years-article> accessed 17
December 2015.
2 Hereafter referred to as the “EU”.
3 KG Broc and R Parry, Corporate Rescue: An Overview of Recent Developments from Selected Countries (Kluwer 2003) 5-6.
4 V Finch, Corporate Insolvency Law: Perspectives and Principles (2nd edn, CUP 2009) 14-15.
5 Council Directive 2001/23/EC of 12 March 2001 on the approximation of the laws of the Member States relating to the
safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of undertakings or businesses [2001]
OJ L82/16 (hereafter referred to as the “ARD”).
6 H Collins, “Transfer of Undertakings and Insolvency” (1989) 18 ILJ 144.
7 Ibid.
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isolation, but must account for the social and economic pressures operating on the law
from the outside as well as the established ways in which the issues are dealt with
internally. Even when economic and social conditions are similar at the time that a
parallel rule is promulgated, the differences in historical journeys to arrive at similar
rules can explain why different jurisdictions do not approach new problems in the same
way.8
This thesis will analyse the legal position of employment protection and corporate
rescue in the UK and France through a historical comparative analysis of the political,
social, and economic developmental context. Based on the understanding of each
jurisdiction’s path dependent position within the legal framework of the EU, reform of
the ARD will be recommended that attempts to balance the aims of corporate rescue and
employment protection in the event of business transfers occurring during corporate
rescue procedures. Given that the regulation of this policy intersection is made within
the EU legal framework, the comparative historical analysis methodology will assist in
identifying the most effective reform that will fit within the varied legal systems of the
EU Member States, and also help to predict how such a reform may be implemented
over time.
This Thesis will provide an innovative contribution to the existing knowledge and
literature in the area of social policy in insolvency by using a comparative, historical,
path dependent methodology to reveal a potentially effective approach to introducing
unique legal reform to the conflicted intersection in the ARD of the promotion of the
rescue culture by ensuring effective business transfers in corporate rescue procedures,
while providing a balanced protection for employees affected by corporate restructuring.

8 J Bell, “Path Dependence and Legal Development” (2012) 87 Tul L Rev 787, 788.
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TABLE OF LEGISLATION
United Kingdom
Ordinance of Labourers in 1349 (Ed III)
Statute of Bankrupts 1542 (34&35 Hen VIII c 4)
An Act Against Usurie 1545 (37 Hen VIII c 9)
Statue of Artificers 1562 (5 Eliz I c 4)
Act for the Relief of the Poor 1563 (5 Eliz. I c 3)
Act for the Relief of the Poor 1597 (39 Eliz I c 3)
The Poor Relief Act 1601 (43 Eliz 1 c 2)
An Act Declaring the Rights and Liberties of the Subject and Settling the Succession of
the Crown 1689 (1 William & Mary Sess 2 c 2)
Bankruptcy Act 1705 (4&5 Anne c 17)
Bubble Act 1720 (6 Geo I c 18)
Truck Act 1725
An Act Preventing the Committing of Frauds by Bankrupts 1732 (5 Geo 2 c 30)
Combination Act 1799 (39 Geo III c 81)
Combination Act 1800 (39&40 Geo III c 106)
Inclosure Consolidation Act (1801) (41 Geo III c 109)
Health and Morals of Apprentices Act 1802 (42 Geo 3 c 73)
Cotton Mills and Factories Act 1819 (59 Geo 3 c 66)
Bankrupts (England) Act 1825 (6 Geo 4 c16)
Combinations of Workmen Act 1825 (6 Geo IV c 129)
Truck Act 1831 (1&2 Will 4 c 37)
Bankruptcy Court (England) Act 1831 (1&2 Will 4 c 56)
Reform Act 1832 (2&3 Will IV c 45)
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The Factory Act 1833 (3&4 Will IV c103)
Poor Law Amendment Act 1834 (4&5 Will IV c 76)
The Municipal Corporations Act 1835 (5&6 Will IV c 76)
Joint Stock Companies Act 1844 (7&8 Vict c 110)
Act Facilitating the Winding Up of Affairs of Joint Stock Companies Unable to Meet
Their Pecuniary Engagements 1844 (7&8 Vict c 111)
Factories Act 1844. (7&8 Vict c 15)
Joint Stock Companies Winding-Up Act 1848 (11&12 Vict c 45)
The Public Health Act 1848 (11&12 Vict c 63)
Joint Stock Companies Winding-Up Amendment Act 1849 (12&13 Vict c 108)
The Joint Stock Companies Act 1856 (19&20 Vict c 47)
Bankruptcy Act 1861 (24&25 Vict c 47)
Companies Act of 1862 (25&26 Vict c 89)
Master and Servant Act 1867 (30&31 Vict c 141)
Bankruptcy Act 1869 (32&33 Vict c 71)
Employers and Workmen Act of 1875(38&39 Vict c 90)
Conspiracy and Protection of Property Act 1875 (38&39 Vict c 86)
Great Public Health Act 1875 (c 55)
Workshops Act 1878 (41&42 Vict c 16)
Bankruptcy Act 1883 (46&47 Vict c 52)
The Truck Amendment Act 1887 (50&51 Vict c 46)
Truck Act 1896 (59&60 Vict c 44)
Bankruptcy Act 1914 (4&5 Geo 5 c 59)
The Master and Servant Act of 1923
Trades Disputes Act was passed in 1927 (17&18 Geo V c 22)
Truck Act 1940 (3&4 Geo 6 c 38)
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Public Health Act 1848 (11&12 Vict c 63)
Contracts of Employment Act 1963
Redundancy Payments Act 1965 c 65
Insolvency Act 1976 c 60
Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981 No
1794
Insolvency Act 1986 c 45
SI 1986 No. 1996 The Insolvency Proceedings (Monetary Limits) Order 1986
Employment Rights Act 1996
Enterprise Act 2002 c 40
SI 2006/246 Transfer of Undertakings (Protection of Employment) Regulations 2006
SI 2014 No 16 The Collective Redundancies and Transfer of Undertakings (Protection
of Employment) (Amendment) Regulations 2014

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France
Code de Commerce
Décret d’Allarde, Loi portant suppression de tous les droits d'aides, de toutes les
maîtrises et jurandes et établissement des droits de patente, Décret de l’Assemblée
constituante, 2 March 1791
Loi Le Chapelier, l'Assemblée Nationale, 14 juin 1791
Ordonnance du 28 novembre 1838 Du Roi Relative à la Liquidation et au Paiement des
Frais de Justice Criminelle
Loi du 24 mars 1841 Relative au Travail des Enfants Employés dans les Manufactures,
Usines ou Ateliers
Loi du 25 mai 1864 Abrogation des Art 414, 415 et 416 Du Code Pénal: Suppression du
Délit de Coalition
Loi du 22 juillet 1867 Relative à la Contrainte par Corps
Loi du 23 décembre 1874 Dite Roussel sur la Protection des Enfants en Bas Age et en
Particulier des Nourrissons
Loi du 11 décembre 1884 Sur les Conseils de Prudhommes
Loi du 4 mars 1889 Portant Modification de la Législation des Faillites
Loi du 9 avril 1898 Concernant Responsabilités dans les Accidents du Travail
Loi du 20 décembre 1906 Relative aux Fêtes Légales Tombant en Vendredi et un Mardi:
Aucun Paiement Exigible ni aucun Protêt n’est dresse le Samedi ou le Lundi
Loi du 2 août 1919 Fixant a Huit Heures par Jour la Durée du Travail Effectif des
Personnes de l’un et de l’autre Sexe et de tout Age Employées sur un Navire Affecte à la
Navigation
Accords de Matignon 1936
Loi du 21 juin 1936 Instituant la Semaine de 40 Heures dans les Etablissements
Industriels et Commerciaux et Fixant la Durée du Travail dans les Mines Souterraines
Ordonnance no 45-280 du 22 février 1945 Institution de Comités d’Entreprises
Loi no 50-205 du 11 février 1950 relative aux conventions collectives et aux procédures
de règlement des conflits collectifs de travail
Law no 55-583 of 20 May 1955
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Loi no 67-563 du 13 juillet 1967 Sur le Règlement Judicaire, la Liquidation, la
Liquidation des biens, la Faillite Personnelle et les Banqueroutes
Law no 85-98 of 25 janvier 1985
Loi no 94-475 du 10 juin 1994 relative à la prévention et au traitement des difficultés
des entreprises
Loi no 2005-845 du 26 juillet 2005 de sauvegarde des entreprises
Loi no 2008-776 du 4 août 2008 de modernisation de l'économie (rectificatif)
Loi no 2014-856 du 31 juillet 2014 parue au JO n 176 du 1er août 2014
Loi no 2015-990 du 6 août 2015 pour la croissance, l’activité et l’égalité des chances
économiques (Loi Macron)

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