Directors Face Criminal Proceedings For Failing to Comply

It has been reported that three former directors of the now-defunct parcel-delivery business, City Link, are facing criminal proceedings for failing to notify the Secretary of State of proposals to make large scale redundancies at the firm.

Implications
Under the Trade Union and Labour Relations (Consolidation) Act 1992 (“TULRCA”), employers are obliged to notify the Secretary of State, in writing, where they are proposing to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less. The amount of notice required depends on the number of proposed dismissals. In addition, employers must also consult on their proposals with representatives of the employees affected by the proposed dismissals, or measures taken in connection with those dismissals.

The purpose of the advance notification is to enable the Government to assist employees facing redundancy. Failure to comply with the statutory notice requirements is a criminal offence and can result in prosecution and a fine, on summary conviction, for both the employer and its officers. The fine is now unlimited. Given this and the recent spate of prosecutions, employers and their management teams may ignore this obligation at their peril. It is evident that the redundant employees may not be the only ones facing personal and professional consequences following mass redundancies.

Use the Redundancy guidance and letters on our HR toolkit to stay the right side of the law.

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