The Insolvency Service is targeting businesses that fail to follow proper procedure when making staff redundant during an administration, marking a serious development for company directors.
The government body has begun criminal proceedings against three directors at City Link, the courier company that collapsed last Christmas Day, and the chief executive of Sports Direct over the failure of its fashion retailer USC in January.
All four executives have been charged with failing to give sufficient notice to the business secretary about plans to lay off staff.
In the case of City Link, more than 3,000 employees discovered that they would lose their jobs after the company called in administrators. About 200 USC warehouse staff in Scotland were given only 15 minutes’ notice of their redundancies.