New practice: Directors at greater risk of being prosecuted personally if collective redundancy procedures not followed
Directors and others involved in planning and making collective redundancies should ensure their company complies with its obligation to notify the Department for Business, Innovation and Skills (BIS), or risk being prosecuted personally.
This update was published in Legal Alert - November 2015
Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.
Employers proposing 'collective redundancies' (making 20 or more employees redundant within a 90-day period) are legally required to send a prescribed form to BIS within specified time limits. Failure to do so is an offence by the employer.
However, if the offence has been committed with the consent or connivance of any director, manager, secretary, other similar officer (or anyone else purporting to act in that capacity), or the failure is attributable to their neglect, that individual also commits an offence. On summary conviction, individuals can be fined up to £5,000.
In the past, prosecutions have usually only been brought against employers. However, in two recent cases charges have been brought against individual executive and non-executive directors. It seems that BIS may be taking a tough, new approach, actively targeting directors and other individuals in breach of the law. Note that there are very limited exceptions to the requirement to comply with these obligations.
- Directors and others involved in planning and making collective redundancies should ensure they comply with requirements to notify BIS, or risk being convicted of a criminal offence.
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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