Redundancies on the rise

This week brought the news that the UK now has over two million unemployed, on the basis of the official government figures. As the number actually seeking benefits is much lower - 1.23 million - Britain is a long way off the grim days of the early 1980s. Nonetheless, the fact remains that unemployment has been rising for many months and redundancy has been a big issue of late.

In the last few days, examples of new redundancies or the threat of them include that of Nokia, with employees of the Finnish mobile phone company's UK headquarters in Farnborough potentially under threat as the firm seeks to shed 1,700 jobs worldwide. Sections of the media have also been cutting posts – examples including the MEN media group, which prints the Manchester Evening News, as well as the BBC.

The latter case may help highlight some of the problems an employer could face when looking to make redundancies. The corporation has run into trouble over proposals for compulsory redundancies, with this being objected to by the National Union of Journalists. The outcome was a strike ballot, with 77 per cent in favour of industrial action. April 3rd and the 9th will see journalists swapping microphones for picket lines.

But while an issue such as compulsion is one area employers may readily think about when they have to lay people off, there are others where all kinds of legal minefields exist.

Writing for the BBC recently, employment law expert Martin Edwards explained that a number of common mistakes are made by bosses when deciding who should lose their job. These can include taking attendance into account when there may be a disability issue concerning the employee in question. Another is subjective selection, while failing to consult on alternatives – such as shorter working hours – is a further cause for frequent complaint. Mr Edwards noted that these kinds of errors can lead to unfair dismissal tribunals, with payouts as high as £66,000.

Business link's own advice has a range of options that employers can consider. One of the first things they can do is look for voluntary redundancies. It noted that this can avoid employment law risks as well as doing less damage to morale. The flip side could come with larger payouts if it is more experienced staff who leave and a possibility that more people volunteer than need to go.

Whether the second problem would occur in a recession situation may be questionable, but as the BBC experience showed, if it can be achieved, it could also save problems with unions.

Another tip provided by the site is to offer early retirement. Again this has pros and cons, it notices, with the voluntary element again involved and the chance sometimes being created to promote younger staff members. However, once more the cost of the payoff may be higher and valuable experience and skills could be lost.

Making staff redundant is no easy task. There may be plenty of emotions involved and the decision to choose who stays and who goes can be tough. But from the point of view of the employer, it is being done to safeguard the business. This being the case, it is important that this is achieved throughout the whole process by ensuring that legal problems are carefully avoided and the redundancy procedure properly followed.

  • Employment News from Lawpack: Solicitor-approved Redundancy Procedure template with expert guidance on how to complete the legal form

Published on: March 20, 2009

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