As we all know, businesses are suffering in the current economic climate and unsurprisingly we are seeing an upturn in redundancies. The latest figures from the Office of National Statistics show that in the 3 months to June 08, the number of unemployed people rose by 60,000 from the previous 3 months. This was as a direct result of 126,000 people being made redundant in that 3 month period (this was up 14,000 from the previous 3 months).

With so many redundancies taking place, employers and employees need to be aware of their obligations and rights. Both parties often fail to appreciate that, in addition to the well known procedural requirements that must be followed in a redundancy situation in order to avoid an unfair dismissal claim. What is often forgotten is that where more than 20 people are being made redundant – onerous requirements in respect of consultation with elected representatives and/or trade union representatives need to be met.

The consultation process must begin in “good time” before any dismissals are made, and whilst there has been much legal debate as to what “good time” means the law is clear that consultation must always be started before any final decisions on redundancies have been made, otherwise the consultation will not have been meaningful and will not have been undertaken "with a view to reaching agreement" over ways of avoiding the redundancies. The classic example is where an employer has decided to close a particular office or establishment, but only starts consulting with employees once the decision to close has been firmly made; thus rendering the consultation, in all reality, as irrelevant. It is likely that such consultation would fall foul of the “good time” requirements.

If an employer fails to comply with their obligations to consult with elected representatives/trade union representatives in good time, an employee may be able to bring a claim before an Employment Tribunal under section 189 of TULRCA. If such a claim succeeds, the employee is entitled to a protective award of up to 90 days’ gross pay.

Employers need to be extremely careful; whilst the economic reality of a business might be that urgent redundancies are required, if a large number of employees are awarded protective awards the total sums would in all probability be devastating. For employees who have been made redundant or who are about to be made redundant, even where they have accepted redundancy payments or entered into Compromise Agreements, urgent advice should be obtained to explore whether they might be entitled to a protective award. Unusually, an employee can not waive their right to claim a protective award under a Compromise Agreement.

At Leathes Prior, Paula Lawn (Associate) specialises in acting for claimants before the Employment Tribunal and she will often consider acting on a “no win, no fee” basis for protective award claims, particularly where a large number of employees might be involved.

Employers who are considering making redundancies should contact Dan Chapman, Head of the Employment Team, on 01603 281109 or at dchapman@leathesprior.co.uk. Dan will be happy to discuss your situation with you on a free, no obligation basis and it is recommended that you take advice at the earliest opportunity to ensure any redundancy process is carried out strictly in accordance with the law.

Employees who require advice about their redundancy, and whether they might have a possible claim for either unfair dismissal or a protective award, should contact Paula Lawn on 01603 281159 or at plawn@leathesprior.co.uk.

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