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Entire workforce made redundant

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Sydney Hardy, Managing Director of Nippy Bus, dismissed his entire workforce by memo stating “I have had enough and realise I cannot work with you, the people I employ, a moment longer”.  He advised the staff that they should not turn up for work the next day and that “I am quitting to pursue my dream of not having to work here”.

Bearing in mind Mr Hardy’s actions, it is unlikely that he fully considered the potential consequences of “closing the doors” and dismissing his workforce.

Where an employer decides to make, at least 20 employees redundant within a 90 day period, there is a requirement for a consultation lasting a minimum of 30 days with those affected employees. Failure to do so will give rise to actionable claims. As a result of the closure, Mr Hardy may be exposed to a number of claims, including claims for loss of notice pay, accrued holiday, unpaid wages and salary and redundancy payments.

Generally, much planning is required when a decision is made for a business to cease trading including the sale of any shares or assets and consulting with employees regarding their redundancies or the transfer of their employment. Mr Hardy's failure to follow a fair process may prove costly.

If you are a business considering ceasing trade or making redundancies or you are being made redundant or dismissed and require advice and assistance then please contact a member of our Employment Department. 

This article is not a substitute for legal advice on specific facts and circumstances. It is designed as a free update on the law at the time of publishing. BakerLaw LLP and/or the writer accepts no responsibility for reliance on this article and recommends that you seek independent legal advice on your specific circumstances prior to taking any steps.