Mr R McCarthy, Claimant’s husband For the First v Respondent — 2023

This was a remote preliminary hearing to consider whether the claims against Francis Clark LLP should be struck out and whether a deposit order should be made against the Secretary of State. No oral evidence was heard. The claimant, Mrs Michelle McCarthy, had been employed by Boundary Precision Engineering Limited since 9 September 1990, had been Finance Director from 1 January 2006, and had entered a loan agreement on 1 May 2013 under which she borrowed £69,162 from the company. In the liquidation she signed a statement of affairs confirming that £80,381.51 remained outstanding under the loan.

The tribunal recorded that the claimant's insolvency-related claims against the first respondent were for statutory redundancy pay, notice pay as breach of contract, arrears of pay, and accrued holiday pay. The agreed statutory minimum amounts were £14,275.00 for redundancy pay, £6,852.00 gross / £5,007.84 net for notice pay, £2,509.31 gross / £1,833.09 net for arrears of pay, and £1,447.89 gross / £1,062.66 net for holiday pay, giving a net total of £22,178.59. The tribunal held that under sections 166, 182 and 184(1) of the Employment Rights Act 1996, together with Insolvency Rules 2016 rule 14.25, the Secretary of State's liability on the National Insurance Fund side could not exceed the insolvent employer's liability and had to reflect mandatory set-off of mutual dealings.

Applying that approach, the tribunal concluded that because the claimant still owed the company £80,381.51, the sums otherwise due from the National Insurance Fund did not exceed that debt and the Redundancy Payments Service was entitled to refuse payment. The tribunal also noted that Francis Clark LLP had never been the claimant's employer and that any complaint about preferential treatment of part of the notice claim would lie in the civil courts rather than the Employment Tribunal. After those matters were explained, the claimant withdrew the claims against both respondents, and the tribunal dismissed them. No deposit order was made.