legal updates
Sunday, 13 Sep 2009
making uncertainty redundant
It seems the fear factor may be stopping employers taking some tough decisions when it comes to redundancies.
A recent survey revealed that many small business owners are too afraid to make cuts for fear of former workers taking legal action against the business.
An insurance company conducted a survey which revealed that around two-thirds of company bosses (64%) think staff would be out for revenge at an employment tribunal and over half (55%) suspect they would attempt to get a bigger compensation payout.
Of the business owners worried about being sued, 73% said it's because the business does not have the necessary funds and over a third (36%) would be worried that they had not followed the correct procedures.
Over a third (37%) of small businesses that have made staff redundant failed to seek legal or HR advice beforehand, exposing themselves to potentially costly claims.
Ultimately employment legislation is in place to prevent employers dismissing employees unfairly, not to deter employers from dismissing employees at all.
The key to minimising the risk of a finding of unfair dismissal at an employment tribunal is to ensure that the company can demonstrate that the decision to enter into making redundancies was justified, and to ensure that the correct procedures were followed.
Employers must ensure that they comply with their legal obligations including the appropriate period and level of consultation with employees, application of a fair selection procedure with which to choose staff for redundancy, and consideration of alternative roles.
Deciding to make redundancies is not a step to be taken lightly, but a fair, thorough and informed approach can greatly reduce the risk of suffering legal reprisals as a result of taking that step.