We can all remember the Christmas day demise of City Link when administrators were called in and 3000 employees were made redundant.
The directors of City Link are now facing criminal proceedings due to their failure to give sufficient notice to the business secretary about plans to make staff redundant.
The Government are fed up of the tax payer picking up the tab when these firms fail to properly consult employees when they go bust.
Employment law states that if more than 20 staff are to be made redundant 30 days’ notice should be given to the business secretary and the employees, if there are 90 or more employees then 100 days’ notice should be given. Failure to give proper notice could result in a criminal conviction and a fine of up to £5,000.
However there is an argument that consulting and giving notice to employees may hasten the demise of a company.
The Government are looking into this but in the meantime it is important for directors of these larger companies facing hard times to abide by the rules or face criminal proceedings.
It is important for anybody facing financial difficulties, whether personally, directors of limited companies or partnerships, to seek advice from a licensed insolvency practitioner as soon as possible.
For more information on bankruptcy, liquidation, administration and all the other insolvency procedures, or to take advantage of our free consultation, please telephone Stella Flemmings on 01377 257788, 01724 230060 or 01904 520116 and she will make you an appointment with one of our insolvency professionals at our Driffield, Scunthorpe or York offices.
Redman Nichols Butler has had a York office for over six years now. John Butler specialises in advising SME businesses in York and North Yorkshire. The Redman Nichols Butler York office address is Westminster Business Centre, Nether Poppleton, York, YO26 6RB.
Redman Nichols Butler has had a Driffield office for 19 years now. Andrew Nichols specialises in advising SME businesses in East Yorkshire. The Redman Nichols Butler Driffield office address is Maclaren House, Skerne Road, Driffield, East Yorkshire, YO25 6PN.
Redman Nichols Butler has had a Scunthorpe office for nearly 4 years now. Mark Neumegen specialises in advising SME businesses in Scunthorpe, Grimsby and all over North East Lincolnshire. The Redman Nichols Butler Scunthorpe office address is Suite 8b, Normanby Gateway, Lysaghts Way, Scunthorpe, DN15 9YG.