Ask an Ealing Expert

'Getting redundancies right'

It’s an unfortunate consequence of these times that employers will inevitably be thinking about making staff redundant.

Employers in this situation want to cut costs and might avoid the cost of consulting a lawyer for help with the process. That might just be a very expensive mistake.

In difficult economic times, employees are less likely to be able to find another job, making it more likely they will sue their old employer if there is any suggestion the redundancy wasn’t fair. And because they are more likely to be out of work for longer, their compensation will be higher.

It is therefore more important than ever to take advice before making staff redundant. It’s important to be certain that redundancy is genuinely the reason for terminating the employee’s contract and is not just seen as a way of getting rid of underperforming staff. If an employee can show a Tribunal that there was no genuine redundancy situation, they are likely to succeed in a claim for Unfair Dismissal.

A genuine redundancy situation is either:

the business closes down completely
the place of business closes
a reduction of work of a particular kind

It’s also important to make sure that employers follow the right consultation and selection process. Unfair selection is another common source of Unfair Dismissal claims.

Sham contract not upheld

In a decision on whether bricklayers were entitled to holiday pay, the Employment Appeal Tribunal decided that a contractual term was never intended to take effect and was therefore a sham.

The bricklayers had a term in their contract allowing them to send a substitute if they were not available for work. The construction company argued that this meant that they were not “workers” but self employed and therefore not entitled to holiday pay. The Employment Tribunal found that this term was never intended to be used and it was therefore a sham and should be ignored. The Appeal Tribunal agreed.

This makes it ever more important that contracts for employees and contractors reflect reality. Using contracts bought or downloaded for free without advice could lead to a Trubunal finding that they are a sham.

October brought more changes

The bi-annual Employment legislation changes are here.

There is the usual increase to the minimum wage, now £5.73 for those 22 and over, £4.77 for 18-21 year olds and £3.53 for under 18s.

Further changes to maternity provisions: employees on additional maternity leave as well as ordinary maternity leave will have their terms and conditions preserved. The rules apply to employees whose expected week of childbirth is on or after 5 October. Similar rules apply for adoption leave.

Agency workers employed on a fixed term contract have the right to Statutory Sick Pay after 27 October.

November 6, 2008