Why might an employer face criminal prosecution if a collective redundancy process is not followed correctly?
There has been considerable media attention on P&O Ferries after it made 800 staff redundant with immediate effect, resulting in accusations that the correct redundancy process had not been followed and also accusations that P&O should face criminal proceedings. The staff of P&O Ferries will almost certainly have successful claims for unfair dismissal and a failure to collectively consult as a result of no redundancy process being followed. However, these claims are separate from the prospect of the company facing criminal prosecution.
The rules on collective consultation already carry a potential criminal offence where an employer fails to notify the Secretary of State (for Business, Energy and Industrial Strategy) in Great Britain (the Department for the Economy in Northern Ireland) on Form HR1 where they are proposing to dismiss as redundant 20 or more employees "at one establishment" within a 90-day period. In Great Britain, section 194 of the Trade Union and Labour Relations (Consolidation) Act 1992 provides that an employer who fails to give notice to the Secretary of State commits an offence and is liable on summary conviction to a fine of up to £5,000. However, following the amendments introduced by the Legal Aid, Sentencing and Punishment of Offenders Act 2012 in Great Britain, offences committed after 12 March 2015 can be punishable by an unlimited fine. It should be noted that, although a company can be charged with this offence, where this is proved to have been committed with the consent or connivance of, or to be attributable to neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, or any person purporting to act in any such capacity, that individual as well as the company is guilty of the offence and liable to be prosecuted. In recent days, the Insolvency Service in Great Britain has also launched a criminal investigation into allegations of corporate abuse surrounding the circumstances of the redundancies.
Some employers may have traditionally focused on the risk of punitive protective awards of up to 90 days' actual pay per affected employee for breaches of the collective consultation process or the potential for unfair dismissal claims. However, as recent developments have shown, the potential criminal risks should not be disregarded in these scenarios.
Continue reading
We help hundreds of people like you understand how the latest changes in employment law impact your business.
Please log in to view the full article.
What you'll get:
- Help understand the ramifications of each important case from NI, GB and Europe
- Ensure your organisation's policies and procedures are fully compliant with NI law
- 24/7 access to all the content in the Legal Island Vault for research case law and HR issues
- Receive free preliminary advice on workplace issues from the employment team
Already a subscriber? Log in now or start a free trial