Workplace rights: Downsizing dangers

With the UK teetering on the brink of recession, another 'r' word is on everyone's lips... redundancy. Economic forecasts are predicting widespread job cuts and higher unemployment in 2009. Employers planning large-scale layoffs should tread carefully if they want to avoid costly tribunal claims. If 20 or more employees are to be dismissed, collective consultation must take place at least 30 days beforehand - or 90 days if 100 or more are going. That means holding discussions with unions if they are recognised for the affected staff, or with elected worker representatives otherwise. Getting it wrong can be expensive. Tribunals can award up to 90 days' pay per employee, and the maximum will apply unless there are mitigating circumstances. Unfair dismissal claims are another potential hazard for employers implementing redundancies. The golden rule is to follow a reasonable procedure: warning and consulting affected employees individually, applying a fair and objective selection process and considering availability of alternative employment. Finally, those dismissed must receive their correct redundancy pay. Even that can be legally hazardous, particularly now that companies making payments above the legal minimum can be sued for discriminating on grounds of age.

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Last Updated: 09 Oct 2013

Michael Burd and James Davies, Lewis Silkin LLP solicitors - e-mail: employment@lewissilkin.com.

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