Insolvency

Oral Answers to Questions — Employment – in the House of Commons at 12:00 am on 29th March 1988.

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Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr 12:00 am, 29th March 1988

To ask the Secretary of State for Employment how many persons have benefited from the insolvency provisions of the Employment Protection Act in the midland region during the current financial year.

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

The total for the first 11 months of this financial year was 11,876.

Photo of Mr Jeff Rooker Mr Jeff Rooker , Birmingham, Perry Barr

Can the Minister explain how the former employees of Midland Professional Cleaning Services could benefit from these provisions, bearing in mind that the company ceased trading, having been paid by the supermarket for which it was cleaning? It is not in liquidation and it has never filed returns to Companies House. Even though these two dozen people are still cleaning the same supermarket, they have lost about six weeks' wages—taken by the company—which they do not stand a chance of getting back simply because the company is not in liquidation. How can they be covered and seek the protection and the benefit of these insolvency provisions?

Photo of Mr Patrick Nicholls Mr Patrick Nicholls , Teignbridge

I thank the hon. Gentleman for his courtesy in giving me notice that he was going to ask that supplementary question. I know that he has been extremely active in contacting my Department to see whether anything can be done to help his constituents. The problem is that under this legislation, passed by the last Labour Government in 1976, my Department is in a position to help only where companies have become insolvent. I have made it my business to look at this question, and, as I understand it, the hon. Gentleman is entirely right.

This company is not insolvent, and therefore under the present state of the legislation nothing can be done. All I would say to the hon. Gentleman is that, apart from the legal remedies which his constituents have, if, for some reason, the company ever were to go into a state of insolvency I hope that at that stage he will contact me again, because I have a great deal of sympathy with the plight of his constituents.