Credit Crunch, Employment Tribunals and Redundancy Warnings
According to a recent forecast by the CBI, at least 10,000 jobs could be lost in the UK’s financial services industry over the next three months and estate agencies are closing at a rate of 150 branches a month, with 4,000 job cuts already this year.
Redundancy is never an easy path to take for a company. It is likely that staff contracts and staff handbooks will already set out the agreed procedures for redundancy within a company. However, even if that’s not the case, there are certain procedures that employers have to follow to comply with the law and to be fair to their employees.
A company can only make someone redundant if a business is to be closed or there is less need for a particular type of job or skill. Generally, redundancy should involve consulting with employees or their chosen representatives, though employers are only obliged to do this if they plan to make 20 or more employees redundant within 90 days.
An employee is entitled to a statutory redundancy payment if they have been working for the employer continuously for two years and a good employer will even provide redundancy advice by bringing in experts to help those employees affected. State benefits and employer redundancy packages will help, but in all likelihood, neither will provide sufficient for any extended period.
Income Protection or Accident Sickness and Unemployment Insurance will help protect against all the financial pressures that will undoubtedly accompany redundancy.
Remember, Income Protection or Accident Sickness and Unemployment Insurance normally carry a “waiting period” whereby cover will not be in force until the policy has been in place for a specified period of time.