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ARTICLE · 20 OCTOBER 2015

Directors In The Twilight Zone: Administ(rate) With Caution

Reed Smith (Worldwide)
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The recent criminal charges being brought against the former directors of City Link Limited (in administration) are a timely reminder for insolvency practitioners and directors to be mindful of their employment law obligations when initiating and carrying out collective redundancies.

United KingdomInsolvency/Bankruptcy/Re-Structuring
Laurence Rees
Laurence Rees
Peter Hardy
Peter Hardy
Colin Cochrane
Colin Cochrane
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The recent criminal charges being brought against the former directors of City Link Limited (in administration) are a timely reminder for insolvency practitioners and directors to be mindful of their employment law obligations when initiating and carrying out collective redundancies.

Background

The case against the directors is being brought by the Department for Business, Innovation and Skills ("BIS") on behalf of the Insolvency Service. The directors stand accused of being in breach of their obligations under section 193 of the Trade Union and Labour Relations (Consolidation) Act 1992 (the "Act"). Section 193 requires that where collective redundancies are being proposed (i.e. dismissals of 20 or more employees within a period of 90 days or less), employers are required to notify the Secretary of State of the proposed redundancies within a certain period before the first of those dismissals takes effect. An employer seeking to dismiss 20 or more employees at

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