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Employment Law

Legal guidance - compliance - software

26 OCT 2015

Criminal prosecutions for failure to notify Secretary of State of collective redundancies

Criminal prosecutions for failure to notify Secretary of State of collective redundancies
Helen Hughes
Solicitor, Veale Wasbrough Vizards

The chief executive of Sports Direct, David Forsey, has been prosecuted for failing to notify the department of Business, Innovation and Skills (BIS) of collective redundancies at the fashion retailer, USC.

Under the Trade Union and Labour Relations (Consolidation) Act 1992 ('TULRCA') employers are obliged to notify the Secretary of State (for Business, Innovation and Skills) (BIS) where they are proposing to dismiss as redundant 20 or more employees (collective redundancy). Failure to notify BIS is a criminal offence and employers are liable on summary conviction to a fine under TULRCA.

USC was bought by Sports Direct in 2011 and was put into administration and subsequently bought by a subsidiary of Sports Direct, leading to 83 redundancies.

Three former directors of City Link, which went into administration in December 2014, have also reportedly been charged under the same legislation. The City Link closure led to the loss of around 3,000 jobs.

Best practice

These criminal prosecutions are thought to be the first under TULRCA and employers should be aware of the consequences of non-compliance in situations of collective redundancy. Fines imposed following a summary conviction were previously capped at £5,000; however, since 12 March 2015 they are now unlimited.
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