City Link Directors Cleared of Failing to Notify BIS of Collective Redundancies

Three directors of City Link prosecuted for failing to notify BIS of collective redundancies have been cleared.

City Link was placed into administration on 24 December 2014, resulting in the loss of over 2000 jobs. 

Employers are required to notify BIS if they propose to make 100 or more redundancies at one establishment within a period of 90 days or less. They must notify BIS at least 45 days before the first dismissal takes effect. Where 20 or more are proposed, this reduces to 30 days.

BIS alleged that the firm's former managing director, finance director and a non-executive director became aware that redundancies were inevitable on 22 December 2014. However, the Secretary of State was not notified of the redundancies until 26 December 2014 (by the company’s administrator).

The Judge ruled that there was no proposal to make redundancies on 22 December 2014 and therefore no obligation to notify BIS on that date . The directors had received a firm rescue offer for the business and genuinely believed that a sale was not only possible but quite probable. 

Although the prosecution in this case was unsuccessful, the fact that the Secretary of State is now using the power to prosecute employers who fail to notify him of collective redundancies will be of concern to employers. Employers need to ensure that notifying the Secretary of State is built into their redundancy processes so that this obligation is not overlooked.