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Firms turn to helpline for redundancy advice

Allianz Legal Protection, an Allianz Insurance subsidiary, said its legal protection helpline recorded a sharp rise in firms seeking advice on making staff redundant.

In July last year Lawphone received a number of employment-related calls, of which 2.4 per cent concerned redundancy. In July this year, that figure rose 36 per cent.

Ian George, senior solicitor at Allianz Legal Protection, said: “We are seeing an unprecedented number of redundancy-related calls. It started off in the transport and logistics sectors and has seen rapid growth across other sectors, clearly reflecting the current economic environment.

“The last ten years have seen a period of good economic growth and it is now clear that many businesses, particularly SMEs, do not have the knowledge or experience of the legal implications of making employees redundant.

“This is the first time many managers will have had to consider downsizing,” Mr George explained, 'Something that their predecessors in the eighties and early nineties had plenty of practice in.

A number of the calls had come from firms trying to use redundancies as a way of getting rid of unpopular or difficult employees.

Mr George warned that attempts to make ‘sham’ redundancies often backfire leaving employers searching for advice to avoid a costly tribunal award.

“The law has moved on since the last economic slowdown in the UK. Employees have greater rights and are entitled to procedural fairness in relation to a dismissal. It is important that businesses follow proper processes or else run the risk of tribunals which can be both costly and potentially damaging to their reputation.

He added: “Many employers don’t realise that you must have a period of consultation before making redundancies.”