Redundancy

Are you becoming anxious that the credit crunch has hit your town? The news that more and more companies are going into administration and having to make redundancies is becoming a familiar story to companies across the country. Many of us are becoming anxious as to whether our jobs or our businesses will survive the credit crunch – where will we all be in 6 months time?

Many of my friends - both employers and employees - have been asking me questions about what the redundancy process involves. Many have never had to consider this situation before. Making redundancies and being made redundant is an uncertain procedure for many people, including yourselves I am sure.

One vital key for employers is to ensure the procedure is fair. Employers must make a fair selection of the employees who will be made redundant and you must not forget to discuss the procedure with those affected. If the procedure is fair, you are on the road to avoiding any further financial liabilities through your former employees bringing a claim against your business – both for unfair dismissal or even discrimination.

On the other hand, employees should check that their position is actually redundant – has any other employee been given your job or have you been made redundant when you could actually carry out another employee’s role? These are vital questions you should be asking yourself and following up.

The magic phrase in the present times seems to be ‘compromise agreements’. “What is this legal jargon?” I hear you asking. A compromise agreement is an effective way for employers to be comforted in the knowledge that, by making redundancies and entering into the compromise agreement, the possibility of any potential claim against them has been compromised.

For employees, those of you who have been employed for less than 2 years with the same company (who do not qualify for statutory redundancy payments) will gain the benefit of being paid some compensation under the agreement. For those of you who do qualify for a statutory payment by entering into a compromise agreement you could also be paid an additional sum. A fair and attractive package for all – especially as the Christmas season is upon us.

The redundancy process is a worry. However, whether you are an employer or an employee you can stand in the comfort that there are ways to make the redundancy process less stressful for all.

19 NOVEMBER 2008

For further information on Linder Myers expertise in dealing with the issues raised in this article please contact:

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EMPLOYMENT DEPT
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rachel.reid@lindermyers.co.uk