If you’ve ever had to deal with a large scale restructure or redundancy within your business then you may be aware that if you plan to dismiss 20 or more staff as redundant then you must give notice to the Secretary of State for Business, Innovation and Skills (BIS). But is this more than mere formality?

On 24 December 2014 City Link was placed into administration with the result that over 2,000 people lost their jobs. They did not report the redundancies to BIS until 26 December 2014, when the notice was lodged by the company’s administrator.

BIS prosecutors brought a case against three of the ex-directors of City Link including the Managing Director, Finance Director and a non-executive Director. The allegation was aware that the three directors would have been aware of the plan to dismiss 20 or more staff by 22 December 2014 and should therefore have made their report to BIS earlier.

It was held that no proposal was made on 22 December 2014 to make the redundancies and that the three directors had hoped that by placing the company into administration on 24 December 2014 the company would be saved and the workforce would not lose their jobs.

Accordingly, the three directors were acquitted.

However, if you ever thought that the notice to BIS was a mere formality to be complied with this is a reminder of how important it is to get the notice in and to do so as soon as it is proposed that 20 or more redundancies will be made.

If you are dealing with a restructure or redundancy program of any size and would like some assistance then please do get in touch.

As always, my direct dial is 01484 821309 or my email address is katebooth@eatonsmith.co.uk

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Posted Wednesday 25th of November 2015