Balancing the Protection of Business and Employment in Insolvency

Table of Legislation xvii
Table of Cases xxiii
Table of Government Reports and Other Documents xxix
Table of Abbreviations xxxi

1 A Path Dependent Comparative Historical Analysis of Employment Protection and Corporate Rescue in the United Kingdom and France 1
1 Introduction 1
1.1 Overview and Aims 1
2 Methodology and Theoretical Framework 3
2.1 The Right Method for the Particular Problem 3
2.2 Legal Origin: Also Not a Methodological Solution 4
2.3 Law and Economics: Not Broadly Applicable 6
2.4 Introducing a Comparative Legal Historical Method 7
2.5 Comparative Path Dependence: A Modern Method for a Modern Problem 8
2.6 Methodological Process: A Thematic Approach 10
3 Conclusion 12

2 The Path to Labour Regulation and Corporate Insolvency Law – A Journey through Early Foundational Historical Experience 15
1 Introduction 15
1.1 Historical Events and the Approach to Legal Problems 15
2 The Evolution of the State and Political System 16
2.1 An Introduction: Parallel Beginnings 16
2.2 The Development of Feudalism 17
2.3 The Renaissance and State Sovereignty 19
2.4 Catholicism and the Reformation 19
2.5 The Enlightenment 21
2.6 The “Enlightened” English State 22
2.7 The “Enlightened” French State 24

2.8 The French Revolution 25
2.9 The English Constitutional Monarchy and Unitary Democracy 29

3 Different Histories Influencing Different Legal Approaches 30
3.1 Differences in the Political Systems of the UK and France 30
4 Conclusion and Transition 32
3 Proletarianisation, Industrialisation, and the Emergence of Labour Regulation in France and Britain 33
1 Introduction 33
1.1 The Historical Survey in Review 33
1.2 An Introduction to Industrialisation and Proletarianisation 34
2 Theoretical Underpinnings of the Industrial Revolution 36
2.1 Pre-Industrial Economics 36
2.2 An Economic Revolution 37
2.3 The Proletarian Plight: Social Theory 38
2.4 Marxist Labour Economics 39
3 The Reality of Industrialisation 40
3.1 Proto-Industrialisation 40
4 The British Industrial Powerhouse 42
4.1 Introduction 42
4.2 British Industrial Economics 42
4.3 The British Labouring Classes: Proletarianisation 44
5 The French Industrial Character 47
5.1 Introduction: A French Approach to Industry 47
5.2 Revolutionary Economics and Physiocracy: Prelude to Industrialisation 49
5.3 French Working Classes: A Differently Composed Proletariat 50
6 The Evolution of Labour Regulation and Social Policy 52
6.1 An Economic and Moral Conundrum 52
6.2 The Evolution of Labour Law as a Concept: Hugo Sinzheimer 54
6.3 Otto Kahn-Freund and British Labour Law 55
7 The Employment Relationship 56
7.1 The Evolution of the Employment Contract 56
7.2 The Evolution of the Contrat du Travail 58
8 Industrial Relations 60
8.1 Industrial Relations in the United Kingdom 60
8.2 Britain’s Collective Laissez-Faire: The Rise of Labour Interest
Power 61
8.3 Industrial Relations in France 63

9 Industrial Regulation in the United Kingdom 65
9.1 Early Social Policy and Labour Regulation 65
9.2 The Factories Acts 65
9.3 The Truck Acts 66
9.4 Health and Safety Legislation 66
10 Industrial Regulation in France 67
10.1 Social Policy and Labour Regulation 67
11 World Wars and the Welfare State 69
11.1 World War I and Labour Regulation in France and Britain 69
11.2 The Interwar Period in Britain 70
11.3 France, the Interwar Period and the Accord Matignon 70
11.4 The Legacy of World War II and Labour Regulation 71
11.5 The Golden Age of Labour Law in Britain 73
12 Labour Politics 75
12.1 British Labour Policy 75
13 Arguments, Parallels and Conclusions 76
13.1 Parallels and Differences between British and French Industrialism 76

4 Historical Perspectives on Debt, Credit, and Insolvency – An Examination of Financial Evolution 79
1 Introduction 79
1.1 A Review of Proletarianisation and Labour Regulation 79
1.2 Connections between Labour and Corporate Insolvency 81
2 Business and Financial History: Perspectives on Debt and Credit 82
2.1 Debt and Obligation: An Ancient Dichotomy 82
2.2 The Elements of Insolvency History 83
2.3 The lex mercatoria and Commercial Law 84
2.4 The Financial Revolution 86
2.5 Debt: From Mortal Sin to Legal Condition 86
3 Revolutions in Economy, Finance and Politics 88
3.1 The Glorious (Fiscal) Revolution 88
3.2 The Mississippi and South Sea Bubbles 89
3.3 French and British Business Attitudes: Diametric Differences 90
3.4 Company Law in England 92
3.5 Company Law in France 94
4 The Evolution of Insolvency Law 95
4.1 Debt, Bankruptcy and Imprisonment 95
4.2 Evolution of Bankruptcy Law in France 96

4.3 Bankruptcy, Insolvency and the French Revolution 98
4.4 The Evolution of Insolvency Law in England 100
4.5 Joint Stock Companies and Bankruptcy in the 1840s 101
4.6 Victorian Bankruptcy Reforms: The Influence of Business 103
5 Theoretical Aspects of Insolvency Law 104
5.1 Bankruptcy Theory: The Benefits of Collective Action 104
5.2 A Proceduralist Approach 105
5.3 Broad Based Contractarianism 106
5.4 The Traditionalist Approach 107
6 French Corporate Rescue: A Fundamental Value 108
6.1 The Evolution of the Rescue Culture in France 108
6.2 Business Rescue in the 1980s 110
6.3 Insolvency Reform in the Twenty-First Century 111
7 Corporate Rescue in the United Kingdom 113
7.1 The Evolution of the Rescue Culture 113
7.2 Business Rescue in the 1980s 114
7.3 Insolvency Reform and the Enterprise Act 2002 115
8 The Aims of Insolvency and Social Policy 117
8.1 The Social Influences on Aims of Insolvency and Corporate Rescue 117
8.2 Employees in Insolvency: Issues of Job Security and Social Policy 118
9 Conclusion 121

5 Acquired Rights and the Insolvency Exception – EU Social Policy Evolution and Influence 123
1 Introduction 123
1.1 A Review of the Historical Context of Insolvency Systems 123
2 The Historical Context of the European Union 125
2.1 The Great War and Social Change 125
2.2 A “Carthaginian Peace” 126
2.3 The International Labour Organisation 127
2.4 Birth of the European Union out of the Ashes of War 128
3 In the Beginning, Was There Social Policy 131
3.1 What Is EU Social Policy? 131
3.2 Social Policy Phase 1: 1957-1973 132
3.3 Social Policy Phase II: 1973-1983 133
3.4 Social Policy Phase III: 1983-1997 134
3.5 Social Policy Phase IV: 1997-Present 136
4 The Birth of the Acquired Rights Directive 137
4.1 The Original Acquired Rights Directive 137
5 EU Jurisprudence and the Evolving Insolvency Exception 139
5.1 Abels 139
5.2 D’Urso 140
5.3 Spano 141
5.4 Déthier and Eurpiéces 141
5.5 The Approach of the ECJ 142
5.6 Reforms to the Acquired Rights Directive 143
6 Implementation of the Acquired Rights Directive 145
6.1 Problems of Divergent Implementation of Directives 145
7 Acquired Rights in France 146
7.1 History 146
7.2 The Operation of French Acquired Rights 148
8 Acquired Rights in the UK 150
8.1 History 150
8.2 Transfer of Undertakings (Protection of Employment) Regulations 1981 151
8.3 Reviewing and Reforming TUPE 152
9 The Insolvency Exception 154
9.1 The Provision in the Directive 154
9.2 TUPE and Insolvency: UK Jurisprudence 155
9.3 Oakland v Wellswood 156
9.4 OTG v Barke 158
9.5 Key2Law 160
9.6 Operation of TUPE in Corporate Rescue 161
10 Analysis and Conclusion 162
10.1 Social Policy, European Unification, and the ARD 162

6 Conflict and Resolution – Path DependentInfluences on the Evolution of Acquired Rights in Corporate Rescue in the UK and France 167
1 Introduction 167
1.1 The Evolution of a United Europe 167
1.2 Introduction to Conflict and Resolution 169
2 Parallel Path Dependent Developments: Summary and Analysis 170
2.1 Comparative Historical Analysis of Path Dependent Development 170
2.2 The Evolution of the State and Legal Systems of Governance 171
2.2.1 The Protestant Reformation 172
2.2.2 The French Revolution and the Rise of Constitutional Governance 172

2.2.3 Civil Law and Common Law: The Influence of Legal Systems 173
2.3 Social Policy and Labour Regulation 174
2.4 Views of Debt, Commercialism and Insolvency 176
2.5 The European Relation 177
3 The Conflict between Corporate Rescue and Employment Protection 179
3.1 An Inherent Struggle 179
3.2 The Acquired Rights Conflict 179
3.3 Criticisms of the Implementation of the ARD 180
3.4 Rover: A Concrete Example 181
3.5 Crystal Palace FC Limited and Another v Kavanaugh and Others 183
3.6 Collective Redundancies and Transfer of Undertakings(Amendment) Regulations 2014 185
4 French Criticism – Chapitre IV: Transfert du Contrat de Travail 187
4.1 The French Approach 187
4.2 French Employment Protection – Criticisms 188
4.3 French Acquired Rights – A Conflict 189
5 Practical Approaches to the ARD 191
5.1 Introduction 191
5.2 Table of Survey Responses 191
5.3 Examples of the Effects of TUPE on Rescue Outcomes 192
5.4 Strategies for Reducing the Impact of TUPE 192
5.5 French Practitioner Strategies for Reducing the Impact of Transfers 193
5.6 PractitionerCriticism of the Transfer of Employment Contracts during Corporate Rescue Procedures 194
6 The Acquired Rights Directive: An Exemption for Corporate Rescue 195
6.1 The Modern Rescue Culture: A Need for a New Approach 195
6.2 Arguments on Social Policy, Employment Protection, and the ARD 196
6.3 How to Approach Legal Reform: The Rawlsian Perspective 199
6.4 EU Methods: Soft Law or Hard Law? 201
6.5 Reforming the Acquired Rights Directive 202
6.6 Reception of Reforms in the Member States 204
7 Conclusion 206
7.1 Conflict and Resolution: Path Dependent Legal Development 206


7 Conclusion 209
1 Chapter 1: 209
1.1 Path Dependency, Employment Protection and Corporate Rescue 209
2 Chapter 2: 210
2.1 The Path to Labour Regulation and Corporate Insolvency Law 210
3 Chapter 3: 213
3.1 Proletarianisation, Industrialisation, and Labour Regulation 213
4 Chapter 4: 216
4.1 Historical Perspectives on Debt, Credit, Corporate Law, and Insolvency 216
5 Chapter 5: 219
5.1 EU Social Policy, Acquired Rights and the Insolvency Exception 219
6 Chapter 6: 221
6.1 Path Dependent Influences on Acquired Rights and Corporate Rescue 221

Bibliography 223