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Tag Archive

7 pitfalls to avoid when making redundancies

As the Chancellor’s coronavirus job retention scheme enters its final phase and the prospect of a return to normal business seems distant for many companies, employers are having to contemplate redundancies if they are to keep their business afloat.

Getting the redundancy procedure right is crucial, as mistakes can open the door for an employee to bring a claim before an employment tribunal, There has already been an increase in claims, particularly in regard to unfair dismissal relating to redundancy.

Here are some common misunderstandings and mistakes for employers to avoid.

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Settlement Agreements

In our series of articles following the collapse of Carillion we have looked at how to avoid making compulsory redundancies along with consultations and redundancies. We conclude the series taking a look at Settlement Agreements.

Settlement Agreements are normally used to bring an employment relationship to an end in a mutually agreed way. They are often used when an employer and employee agree that their employment relationship is no longer working, and can be used to conclude a workplace dispute.

If as an employer you have been unable to avoid staff losses then a settlement agreement can also be a sensible way to document agreements reached concerning the termination of employment.

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How to avoid Compulsory Redundancies

We wrote recently about how the liquidation of a large company can have potential indirect consequences for small and medium businesses. Through no fault of their own, a small or medium sized business can suddenly find that cash flow is drastically affected.

Often, in those circumstances, the knee jerk reaction is to look at ways to reduce outgoings and one of the simplest ways to do that is to reduce staff.  Many small businesses are reporting that following the collapse of Carillion they may have no alternative but to look at making staff redundant.

It is however worth considering that there are ways to avoid making compulsory redundancies, which can sometimes be costly in the short term.

Before you conclude that redundancies are necessary, consider the following options –

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Brexit and Redundancy; a guide for employers

As the Brexit negotiations start getting into full swing and the likes of JP Morgan start looking at moving their offices away from the UK this will mean redundancies are inevitable. While your business may not to the same scale of JP Morgan, if you lose contracts then it will mean, you will need fewer employees to deliver the service. Again, redundancies are inevitable, so here’s a quick guide to ensure that you remain within the right side of the law. 

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