Mrs E Naylor v Buckley Lamb Ltd

Andrew Boast
15/05/2020
33
5 min read
Mrs E Naylor v Buckley Lamb Ltd case summary from employment law friend
What happens when you are owed thousands of pounds from your employer that’s being or has been struck off? What happens when you are made redundant and left with no job and no money? What is next for you if a company breaches your employment contract and suddenly decides to throw you to the wind?

This is what faced the unfortunate employee Mrs E Naylor when her employer, Buckley Lamb Ltd, was found by the employment tribunal to have breached her employment contract. Mr Naylor fought and won her own case, a true DIY success. The facts spoke for themselves, but was it worth it when the company was being struck off?

Mrs E Naylor v Buckley Lamb Ltd

Buckley Lamb Ltd was a work wear manufacturing company in Sutton-in-Ashfield owned by Richard Lamb (also a director of Anze Limited). In this particular case it is never mentioned why the company forced a redundancy in such a mass scale. Though it is made apparent that legally none of the procedures were handled correctly which left Mrs Naylor and three other former employees with a huge claim and a chance to win back the money that was due to them under their contract of employment.

In Mrs Naylor’s case she presented the tribunal with not one, but four accounts of where her contract of employment had been breached by Buckley Lamb and these are:

  • The first a claim that the company refused redundancy pay as she was entitled a whopping £7,458.88
  • Naylor also claimed breach as her notice was not respected this also grants her an impressive £3,020.88
  • with that, a third breach of holiday entitlement resulting in £616.35
  • and finally a deduction in wages that would cost the company a further £616.35. This all totals to a well deserved £11,712.46 that Mrs Naylor was rewarded in the tribunal.

This is without even mentioning the three other cases who were also each granted around £10,000 in money due to them under their contract. This is a loss of at least £30,000 for Buckley Lamb.
Mrs E Naylor v Buckley Lamb Ltd case summary from employment law friend
Will Buckley Lamb pay?
Mrs Naylor won the battle but will she win the war and get her money back? In January 2020 there was a First Gazette notice for compulsory strike-off. The two ways a company can be stuck off the register at Companies House:

    1
    Voluntarily, if the Directors decide to dissolve the company
    2
    a third party could petition for its compulsory dissolution
What happened here though is the company was being compulsorily struck off, which means Buckley Lamb hadn't filed their end of year accounts or annual confirmation statement (mandatory for companies to do each year). Had the director Richard Lamb forgotten? Or; chosen not to do this, in light of the employment claim?

What Buckley Lamb didn't plan for, is that a few days after the compulsory strike-off , there was an application under section 1000 of the Companies Act 2006 for the temporary suspension of the strike off. Whilst we don't know who made this application, the claimants would appear to know their stuff. You see by stopping the strike off, the claimants can enforce their recent win and become a liability of the company. A company cannot strike themselves off if they have more liabilities than assets (how much you owe versus money in bank/assets). The £30k claim that Mrs Naylor and her fellow employees have now won means the company has a large liability to pay.

Unfortunately this still doesn't mean that Mrs Naylor will see any money because the Director, Richard Lamb, could go into liquidation. Under the Insolvency Act 1986 - Section 123 - Definition of inability to pay debts states:

"A company is also deemed unable to pay its debts if it is proved to the satisfaction of the court that the value of the company’s assets is less than the amount of its liabilities, taking into account its contingent and prospective liabilities."

Mr Lamb could file for a winding up order and place his company into liquidation and Mrs Naylor would only get paid if there is any money left after HMRC and other preferential debtors are paid first. An investigation will be conducted into the conduct of Mr Lamb as director by the Official Receiver (appointed by the court). Richard Lamb may struggle to defend the position of breaching the contract of his employees.

We won't know for sure if Buckley Lamb ever paid their employees the award set by the Employment Tribunal, however the actions of Mrs Naylor and her colleagues of applying to the Tribunal and also monitoring Companies House to stop the company being struck off gave them the best chance possible.


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