‘Joke’ insolvency plans

Planned government action on dodgy bosses who use insolvency to avoid paying wages and pensions are a “joke”, Unite has said.

Bosses who dissolve their companies to get out of paying workers and meeting pension contributions could be hit by fines under the plans.

Unite said the proposals were a “joke”, while the TUC described them as “tinkering at the edges”.

Under pressure ministers – who are keen to be seen taking action after the devastating fallout on workers from the collapse of Carillion and BHS – are proposing stricter insolvency laws.

Business minister Kelly Tolhurst announced the plans on Saturday (August 25), saying that “recent large-scale business failures have shown that a minority of directors are recklessly profiting from dissolved companies”.

As well as fining bosses, firms could also have to prove they have enough money for wages and pensions if they are forking out dividends to shareholders.

Unite assistant general secretary Steve Turner said that even if the plans were enacted the government would still be giving far more leeway to irresponsible and greedy executives than they do to ordinary people who find themselves in debt.

He said, “Planned government ‘action’ on insolvency is a joke. Using legal scams to avoid paying wages and pensions owed to workers is wage theft!

“Seize their assets just like you shamefully and happily do the poorest who struggle with nothing already.”

The TUC said the plans are “tinkering at the edges” and called for an overhaul of corporate governance in the UK.

This includes delivering on Theresa May’s election campaign promise to install worker representatives on company boards, which she has since renegaded on.

The government will set out more details on its plans to tighten insolvency laws in autumn.