Criminal redundancy exercises
Many employers know that they are required to consult collectively with employees at risk of redundancy, for a minimum of 30 days before the first dismissal takes effect where redundancies of 20 or more employees are proposed within a 90-day period, or 45 days where 100 or more employees are affected
However, it seems that some have forgotten a crucial requirement of Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 and there have been recent cases of criminal proceedings being taken against company directors in such cases. These include the Chief Executive of Sports Direct and three former City Link Directors.
The regulations require employers to notify any unions involved before commencing consultation (commonly described as the s.188 notice) and the Secretary of State via a form called HR1 within the time scales indicated above.
The criminal charges concern not the failure to consult, but the failure to submit the form HR1. Often the notifications to the trade union /employees representatives and Secretary of State are done at the same time. But the penalty for failure to inform the Secretary of State has not been used before now, until pursued in these cases by the Insolvency Service.
Importantly the regulations state that where an employer fails to give the notice, the organisation commits an offence that, on conviction, can result in a fine which (since 12 March 2015) is uncapped.
Furthermore section 194 (3) of the regulations says that an offence under this section if, “committed with the consent or connivance of, or…attributable to neglect on the part of, any director, manager, secretary or other similar officer,” can result in an individual being charged and made personally liable.
None of the above applies if you are proposing to make 19 or fewer employees redundant but the moral of this tale is; don't forget to submit the form!
Posted on 19 Nov 2016