Redundancy challenge

Redundancy pay cases accepted by employment tribunals shot up by 76% to 19,000 in the year to 1 April 2010, and a further 8,600 cases were accepted in the six months to 1 October 2010.

Law firm EMW says disputes may arise where employees in the “second or third wave” of redundancies receive a less attractive package than those who lost their jobs first.

Jon Taylor, head of employment at EMW, says: “This is a huge rise in claims well after the wave of redundancies we saw at the peak of the financial crisis, which suggests that with employment prospects remaining uncertain, employees that have been made redundant are more motivated to take legal action over the size of their redundancy payouts.

“Employers need to be aware that redundancy payouts could be seen as setting precedents.

“Departing staff will be particularly resentful if they feel that colleagues who performed less well and so were let go first have been rewarded with bigger payouts. One way employers can avoid this is by preventing departing staff members from talking about the terms of their settlement through a clear policy, and taking action if it becomes clear that employees are not abiding by agreements.”