A court has approached the interplay between the Insolvency Act 1986 and the UK Government’s furlough scheme so as to encourage and support the rescue culture and facilitate access to the scheme by administrators. It ruled that:
- employees consenting only to be paid the capped amount provided under the scheme could receive no more than the capped amount; and
- their contracts would be “adopted” by the administrators, so as to make their salary capped on this basis payable on a priority basis, on the earlier of the date of an application under the scheme or when payments are made to the employee following the receipt by the company of the furlough grant.
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