A human resources company in Ringwood, which represents companies across the South Coast and London, has recently seen a 30 per cent increase in the volume of calls through its advice centre and staff say a considerable number of enquires relate to potential redundancies.
Helen Clarke, Managing Director of Jaluch, said: “A lot of companies are trimming their staff quotas and seeking greater efficiencies. It is gaining momentum.
“Bosses considering large scale redundancies generally have the support of human resources, but those making just one or two people redundant can slip below the radar and make very costly mistakes.”
Among the errors that could constitute unfair dismissal are failure to consult adequately, failure to follow the statutory dismissal procedure and omitting some staff from redundancy selection pools.
Other errors that could cost businesses are failing to offer the correct redundancy pay or miscalculating tax-free elements of any payoff.
Helen added: “This is a stressful time – there is much uncertainty about the possibility of recession. Current financial markets mean there will inevitably be a large number of redundancies and failing to manage the process properly could incur hefty costs.
“The legal costs leading up to and attending at tribunal, even for just a one day hearing, can be £10,000. We’ve heard of companies that end up closing down because of cash flow problems resulting from legal fees and compensation awards.”
Referring to the current market, Helen added: “Some of our clients are being bullish and pressing ahead with training, but others are being very cautious and some have already made redundancies.”
