As the economy continues to slow down, many organisations are faced with having to make redundancies to secure the future of their business. Law firm, Howes Percival has received a marked increase in redundancy related enquiries and warns employers that they could risk facing Employment Tribunal claims if they do not act correctly when letting staff go.

This month new figures from the Employment Tribunal were released showing that awards for unfair dismissal claims increased from £19.8million in 2004/05 to £26.6 million 2006/07. Employers have strict legal obligations in making redundancies which, if not correctly followed, could leave them facing claims for unfair or wrongful dismissal. Mismanaging redundancy can be a costly mistake.

Tom Sharpe, Employment expert at Howes Percival LLP said, ”One of the major consequences of the economic downturn is that many companies have had to look at cutting their overheads, including reducing their staff costs - only this week it was announced that 2,200 job will go at Virgin Media and 620 at Glaxo. Recently, we’ve seen a significant increase in calls from employers seeking advice on redundancy.

“Redundancy is a complex and difficult area for employers – who are expected to follow defined procedures and legal provisions. Redundancies must be carried out fairly and in a professional manner, if not, employers could find themselves faced with a claim for unfair or wrongful dismissal. The latest Employment Tribunal figures published last week show a substantial increase in awards for unfair dismissal and, because out-of-court settlements are not included in these figures, the real cost to employers will be much higher. In addition, if the process is not handled properly, their remaining workforce could be left feeling demoralised and de-motivated. When considering redundancies, we strongly recommend employers to take legal advice to ensure they are fully aware of their responsibilities.”

Howes Percival LLP has drawn-up three golden rules for employers faced with making redundancies:

• Prepare fully and consider all options before announcing a proposal to make redundancies- in the current economic climate it is natural for employers to want to achieve cost savings quickly, but making redundancies is definitely a case of less haste and more speed;

•Ensure that you fully explore all options with employees as part of any consultation process, since a failure to properly consider matters such as alternative employment and other means of avoiding redundancies could fundamentally undermine the fairness of any resulting dismissals; and

•Ensure that as a bare minimum you comply with the statutory dismissal procedure.

Howes Percival LLP offers two fixed fee services aimed at small to medium sized companies to help them deal with the growing burden of managing employment laws and regulations, while helping to manage costs. A Fixed Fee Tribunal Service and a Hotline Advice telephone service, giving clients access to quality advice on ad-hoc employment law enquiries.