Companies Do NOT Go Bankrupt

Posted on May 26, 2024. by NTI

Dear Rachel

If you want to win the vote of insolvency practitioners, then perhaps you should take a quick glance at the NTI Compendium.  When you do, you will note the Compendium defines Bankruptcy as a “statutorily defined process that can be taken by a debtor… who is seeking a personal insolvency solution”. 

Debtor. Personal. Not company.

If you had done so before your first big TV interview of the election campaign with Neil’s favourite, Laura Kuenssberg, then you wouldn’t have made the mistake of referring to companies going through Bankruptcy proceedings.  If you rewatch the interview, you will note Laura uses the word restructuring, as indeed does “Labour’s Plan to Make Work Pay”, which the interview was referring to.

The document outlines Labour’s plan to end the “Fire and Rehire” practice, which is where an employer makes an employee redundant and then re-engages them on reduced terms and conditions. Labour’s document continues that “the threat of fire and rehire is often enough to ensure employees are ‘voluntarily’ agreeing to lower pay and reduced terms and conditions.  It is important that businesses can restructure [note Rachel, not Bankruptcy] to remain viable, preserve their workforce and the company when there is genuinely no alternative”.

We agree, Ms Reeves, with the tone of your comments that Fire and Rehire, when undertaken in the way P&O Ferries did in 2022 when it made just under 800 staff redundant and replaced them with agency workers, was a “scourge” and “deplorable”.

Indeed, earlier this month, the boss of P&O Ferries, Peter Hebblethwaite, admitted as much to a committee of MPs when he said he was deeply sorry for the redundancies and "we would not make that decision again".  Amazing what a bout of negative PR does to your moral compass isn’t it?

Mr Hebblethwaite (who is surely up for first prize in Mr I've got the most Yorkshire sounding surname - anyone else reading that name with the voices of Wallace & Gromit) confirmed to the MPs that he couldn't live on the £4.87 an hour some of its crew are paid.  He also revealed at the same time he earned more than £500,000 last year, including a bonus.

Rather amazingly, the figure of £4.87 a hour includes overtime and bonuses, whilst the average P&O workers make £5.20 an hour although this is in excess of the minimum basic wage set out by international law.

Yours faithfully

The NTI Newsroom

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