Firms risk Tribunals from Credit Crunch Redundancies
Employers are risking employment tribunal claims by not following statutory redundancy procedures when laying–off staff as part of their credit crunch cutbacks, employment law firm Croner Consulting has warned.
According to the UK Tribunal Service, there has been a 42% rise in employment tribunal claims during the last 12 months. Croner’s employment technical consultant, Gillian Dowling, said:
“These figures are a direct result of the impact of the credit crunch. In a bid to survive the current economic pinch, many firms are looking at ways to preserve the future of their business, and see staff redundancies as the only way to do this.
“We’ve seen redundancies happening across the board, at businesses of all sizes,” she added. “When employers start looking at cost saving, then redundancy is often the first thing they consider.”
Dowling warned that while many employers look to cut costs via staff redundancies, some have found themselves facing the additional financial burden of employment tribunals.
“Firms should be rigorous in following fair redundancy procedures in order to avoid the risk of unfair dismissal claims by employees,” she said.
“SMEs are often more at risk when making redundancies as they often don’t have an HR department. If they haven’t had to make a redundancy before, a manager normally just calls the employee into the office and makes a dismissal.“
“Redundancy is only fair when the proper procedure is followed and there is a statutory reason for that decision – such as the work has dropped off, or the job is being re–located for example. This is where SMEs usually fall foul and open themselves up to facing an employment tribunal.”
“In the event an employer is making one person redundant in a group of workers all doing the same job, there has to be a good reason for choosing that person, be it previous disciplinary record, or a lack of the skills that the business needs in future.”
Download a free guide to handling redundancies, visit the Acas website