British Home Stores Collapse: The Case for an Employee Derivative Claim

Authors

Neshat Safari, The City Law SchoolFollow
Martin Gelter, Fordham University School of LawFollow

Document Type

Article

Publication Title

Journal of Corporate Law Studies

Volume

19

Publication Date

2019

Keywords

British home stores, abuse of power, employee’s vulnerability, corporate governance reforms, employees derivative claim right

Abstract

British Home Stores collapsed led 11,000 employees to lose their jobs and faced substantial cuts to their pension with a £571 million pension deficit. In light of the BHS scandal, the UK Government has proposed a set of corporate governance reforms to strengthen the employee voice. Although the government’s approach towards strengthening the employees’ protection is well intentioned, we argue that without providing a derivative claim right for employees, these measures will likely have little impact in practice. Hence we suggest that to safeguard the employees’ interest in the company and to enhance the overall protection of the company, in addition to the current proposed reforms, the standing for bringing derivative claims should be broadened to the employee’s representative.

Recommended Citation

Neshat Safari and Martin Gelter, British Home Stores Collapse: The Case for an Employee Derivative Claim, 19 J. Corp. L. Stud. 43 (2019)
Available at: https://ir.lawnet.fordham.edu/faculty_scholarship/1019