By Laura Chalkley employment law specialist and law firm Maxwell Hodge based in Liverpool.
The latest Tribunal Service figures show the number of employment tribunals continued to rise last year, after peaking at the end of 2009.
The service had 220,400 new claims in the second quarter of last year, from July 1 to September 30 2010, representing an 11% increase over the same period in 2009.
There is no doubt that the economic crisis has fuelled the rise in tribunal claims, however many will also blame the increase in employment legislation and the publicising of high profile, high pay-out cases for discrimination.
With the huge number of firms being forced to make redundancies, it means the number of unfair dismissal cases is now at an all time high.
We have noticed a dramatic increase in companies facing employment tribunal claims because they have not followed the correct procedures when making their staff redundant.
In these tough times 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. In addition to a redundancy payments 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. Companies need to be clear about their redundancy processes, so they can avoid legal action and costly unfair dismissal claims being made against them.
This is bad news for small businesses, which are less likely to have formalised redundancy processes in place and leave themselves more open to compensation claims simply because they haven’t taken the appropriate action.
To avoid costly tribunals firms need to become better informed on their legal responsibilities to staff and ensure they get advice from a legal specialist. Employment law is a mindfield and the support of an expert in the area is vital. They can work with the employer to make sure the right procedures are in place and the firm is complying with the law.
If an issue does arise or is anticipated, such as the need to make redundancies firms should again bring a legal expert to aid with the process, that way they can ensure they avoid any potential tribunal.