A local law firm has revealed that the number of unfair dismissal cases arising out of redundancy procedures are at an all time high.
With businesses being placed under increased financial strain Maxwell Hodge is advising firms to make sure they follow the correct procedures or it could cost them thousands of pounds in legal costs.
Laura Chalkley, Employment Law specialist at Maxwell Hodge in Liverpool said: “We have noticed a dramatic increase in companies facing industrial tribunals because they have not followed the correct procedures when making their staff redundant.”
The growth in staff cut backs across companies in Merseyside, and the UK in general is linked to the struggling economic climate.
Laura said: “In these tough times local employers may feel they are saving money by laying off staff or making them redundant, but they could in fact be costing themselves thousands of pounds if they do not carry out the correct redundancy consultation process”
When making a staff member redundant, an employer is breaking the law if they do not follow a redundancy consultation process with the staff member concerned.
Laura said: “Companies need to be clear about their redundancy processes, so they can avoid legal action and costly unfair dismissal claims being made against them.”
To a small-sized company, the cost of employing a legal firm to defend an employee’s claim against them can cost around £5,000 in legal fees
In addition to a redundancy payment based on an employee’s age and length of service, an employee who successfully brings a claim for unfair dismissal will be awarded a compensatory award for loss of earnings which the respondent company will be ordered to pay.
Laura Chalkley urges local companies to seek legal advice regarding redundancy processes and avoid any unnecessary, very costly legal disputes.
Laura said: “Smaller companies who are less likely to have formalised redundancy processes in place are often being most heavily affected by the high legal costs they end up facing.”
Maxwell Hodge have offices in Liverpool, on the Wirral and across a number of other locations in Merseyside www.maxweb.co.uk
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