press release
Birmingham lawyers see rise in redundancy enquiries
11 November 2008
Employment law specialists at Birmingham
law firm Browne Jacobson have seen a significant rise in the number
of local businesses seeking advice on the do’s and don’ts of
redundancy.
It is believed that new employment laws,
driven by EU directives aimed at stopping age, racial, gender and
religious discrimination, have prompted employers to contact legal
advisers before they consider redundancy programmes, given the
growing likelihood of a long-term economic downturn. While this is
a sober reflection on the state of the economy, it shows that
businesses are taking their responsibilities seriously as
employers, according to the law firm.
James Tait, an employment specialist at Browne
Jacobson, said calls from employers for advice on job cuts had
doubled compared with six months ago. “Despite jobless figures
now edging towards the two million mark it looks like we will see
this trend continuing for many months yet,” he says.
The employment outlook has deteriorated
rapidly as the credit crunch and dwindling consumer confidence have
begun to hit a range of business sectors in the West Midlands. With
the latest jobless total in the West Midlands rising to 170,000,
Browne Jacobson agrees that the threat of further redundancies is
no longer limited to the financial services sector, but has entered
the ‘real’ economy.
The Engineering Employers Federation,
representing more than 6,000 mainly small and medium-sized
manufacturers, reported that the number of calls to its helpline
for advice on staff cuts and shorter working hours has shot up
“significantly” in recent weeks.
“Employers will have to be more careful
about how they choose workers for redundancy this time,” says James
Tait.
“People are much more savvy about their
legal rights now compared to previous recessions. This, coupled
with the raft of new legislation, really puts the onus on employers
to ensure they are taking all the right steps to stay within the
law when seeking to make staff redundant.
“On the positive side, we are seeing that
more businesses are taking advice early and exploring all of the
options to redeploy people wherever possible before hitting the
‘redundancy’ button. Wherever possible, the redundancy process
should be both open and measured, where all available alternatives
are considered. We are seeing more employers doing the right thing
such as talking to skilled employees about more flexible working,
considering agency workers to cover difficult spells, and using
their retirement procedures as a way of keeping numbers within
workable limits.”
Browne Jacobson is also concerned that
businesses which do not take advice early in the redundancy process
could fall foul of the raft of age discrimination and sex
discrimination legislation that has seen a rise in this type of
dispute in recent years.
However, it is not just older employees who
might think they have a claim, according to Tait, who believes that
younger workers may also be able to claim that they have been
discriminated against on age grounds.
He says: “The age old redundancy formula
of “last in, first out” risks falling foul of age discrimination
laws, and targeting older staff for redundancy who may in fact have
valuable skills and expertise to get businesses through the hard
times, can be costly. Calls have increased significantly recently
with businesses asking for us to help them look outside the
conventional boxes which is good to see.”
Tait adds that the majority of calls are from
medium-sized companies, especially from the construction, transport
and certain manufacturing sectors. Initially they had been mainly
from transport companies concerned about the rising cost of fuel,
but Browne Jacobson is now receiving more enquiries from a range of
manufacturing and service sector firms.
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