Record calls on redundancy

Allianz Legal Protection is reporting a record number of calls about redundancies to its legal protection helpline, Lawphone.

In July 2007, just 2.4% of calls to the insurer’s service were related to employment and redundancy. This had rocketed to 36% by July 2008.

The insurer believes a number of the calls have come from firms who have tried to use redundancies as a means of reconciling differences with difficult employees.

However, the company says these attempts to make “sham” redundancies often backfire, leaving employers searching for advice to avoid a costly tribunal award.

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 present slowdown follows a decade of strong growth and Allianz said many businesses, particularly small and medium-sized enterprises, did not have experience of making employees redundant – or knowledge of the legal implications.

The insurer said many managers were considering downsizing for the first time; a process their predecessors in the eighties and early nineties had plenty of practice in.

George added: “The law has moved on since the last 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.

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