Croner issues redundancy warning

23 July 2008

With fears of an economic recession around the corner and employment tribunals on the rise, Croner is warning employers that redundancy is not the easy solution that they seek.

For many employers it may be the first time that they have considered making staff redundant. There is therefore the risk that those facing this difficult decision for the first time will be unaware that they have to follow fair redundancy procedures to avoid unfair dismissal claims being brought by employees.

Croner has seen a 50% rise in the claims it handles on behalf of employers over the last three months, while newly released figures from the Tribunals Service show a 42% rise in claims over the last 12 months.

Richard Smith, head of litigation at Croner, says: “What we have seen over the last 12 months, and certainly in the last three, is a sharp rise in employment tribunal claims which is a direct result of the credit crunch.

“Economically this is a dark time for UK businesses and employers are increasingly looking at ways in which to preserve their long-term future. Many believe that the only way to do this is to make employees redundant. However, because they’re often unaware of the procedures involved in dismissing someone fairly they are not only paying out the costs of making staff redundant, they’re also faced with litigation costs and tribunal awards.”

Croner advises businesses to seek professional advice before making staff redundant to ensure they handle dismissals fairly and act within the law.