Employment Protection (Consolidation) Act 1978

127 Interpretation of ss. 122 to 126. E+W+S

(1) For the purposes of sections 122 to 126, an employer shall be taken to be insolvent if, but only if, in England and Wales,—

[F1 (a) he has been adjudged bankrupt or has made a composition or arrangement with his creditors;

(b) he has died and his estate falls to be administered in accordance with an order under section [F2 421 of the Insolvency Act 1986]; or]

(c) where the employer is a company, a winding up order [F3 or an administration order] is made or a resolution for voluntary winding up is passed with respect to it, or a receiver or manager of its undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by a floating charge, of any property of the company comprised in or subject to the charge [F3 or a [F2 voluntary arrangement proposed for the purposes of Part I of the Insolvency Act 1986 is approved under that Part]].

(2) For the purposes of sections 122 to 126, an employer shall be taken to be insolvent if, but only if, in Scotland,—

(a) [F4 sequestration of his estate is awarded] or he executes a trust deed for his creditors or enters into a composition contract;

(b) he has died and a judicial factor appointed under section [F5 163 of the M1 Bankruptcy (Scotland) Act 1913][F5 11A of the Judicial Factors (Scotland) Act 1889] is required by that section to divide his insolvent estate among his creditors; or

(c) where the employer is a company, a winding-up order [F3 or an administration order] is made or a resolution for voluntary winding up is passed with respect to it or a receiver of its undertaking is duly appointed [F3 or a [F2 voluntary arrangement proposed for the purposes of Part I of the Insolvency Act 1986 is approved under that Part ]].

(3) In sections 122 to 126—

• “holiday pay” means—

(a) pay in respect of a holiday actually taken; or

(b) any accrued holiday pay which under the employee’s contract of employment would in the ordinary course have become payable to him in respect of the period of a holiday if his employment with the employer had continued until he became entitled to a holiday;

• “occupational pension scheme” means any scheme or arrangement which provides or is capable of providing, in relation to employees in any description of employment, benefits (in the form of pensions or otherwise) payable to or in respect of any such employees on the termination of their employment or on their death or retirement;

• [F6 “personal pension scheme” means any scheme or arrangement which is comprised in one or more instruments or agreements and which has, or is capable of having, effect so as to provide benefits, in the form of pensions or otherwise, payable on death or retirement to or in respect of employees who have made arrangements with the trustees or managers of the scheme for them to become members of the scheme;]

and any reference in those sections to the resources of F7 a scheme is a reference to the funds out of which the benefits provided by the scheme are from time to time payable.

Textual Amendments

F1 S. 127(1)(a)(b) substituted by Insolvency Act 1985 (c. 65, SIF 66), s. 235(1), Sch. 8 Pt. I para. 31(5)(a)

F2 Words substituted by Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14

F3 Words inserted by Insolvency Act 1985 (c. 65, SIF 66), s. 235, Sch. 8 Pt. I para. 31(5)(b)

F4 Words substituted by Employment Act 1989 (c. 38, SIF 43:1), s. 29(3), (6), Sch. 6 para. 23, Sch. 9 para. 4(1)

F5 Words from “11A" to “1889" substituted (S.) for words from “163" to “1913" by Bankruptcy (Scotland) Act 1985 (c. 66, SIF 66), s. 75(1), Sch. 7 para. 14(4)

F6 Definition inserted by Social Security Act 1986 (c. 50, SIF 113:1), s. 86(1), Sch. 10 Pt. I para. 31(3)

F7 Word repealed by Social Security Act 1986 (c. 50, SIF 113:1), s. 86(2), Sch. 11

Marginal Citations

M1 1913 c. 20.