What do we already know?
It is a legal requirement (under section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A)) that employers should notify the Secretary of State in collective redundancy situations. This involves the submission of a standard form, HR1. When exactly the form needs to be submitted varies according to the number of redundancies so that, where 20-99 redundancies are proposed, the form must be submitted at least 30 days before the first dismissal or, for 100 or more employees, at least 45 days before the first dismissal.
Failure to comply with these requirements is a criminal offence, attracting potential penalty of unlimited fine and a criminal record for the organisation’s directors and/or other senior staff.
It appears from recent reports that the Government is increasingly pursuing organisations and their senior staff who fail to file the HR1 form on time – even where the business falls insolvent and administrators or receivers are appointed last minute.
The latest example is the chief executive of Sports Direct, who has been prosecuted under section 194 of TULR(C)A for failing to give the required 30 days’ notice to the Government (BIS) of collective redundancies which took place earlier this year at a subsidiary of Sports Direct. In this case, 83 warehouse staff were made redundant after the chain’s subsidiary went into administration and was then bought by another subsidiary of Sports Direct. The case is ongoing.
It has also been reported that three former directors of City Link have been charged with the same offence, over the collapse of the delivery company in December 2014, leading to the loss of around 3,000 jobs. These are thought to be the first criminal prosecutions under section 194 of TULRCA 1992.
This is a (slightly scary!) reminder of the importance of filing an HR1 form on time. Given the complexities in any collective redundancy situation, but in particular in insolvency situations, it’s best to act as early as practicable in filing the form. Whatever the circumstances it is also recommended that you keep records of reasons behind any delay and seek legal advice. Our team will be happy to help with this and other queries arising on the collective redundancy process and please do not hesitate to contact Luke Menzies at email@example.com or 0845 113 0150 or any other member of the team.