Some small business owners are being hit with lawsuits because they’ve failed to follow the correct statutory procedures when it comes to making employees redundant.
Small business insurer Hiscox says there has been a threefold rise in insurance claims during the last quarter from SME employers being sued by former workers for unfair dismissal. The firm says employers are leaving themselves exposed to significant claims.
According to Hiscox, the top three claims when it comes to redundancies are:
1. Failure to follow collective consultation procedures and obligations – necessary where 20 or more workers are at risk and are proposed to be made redundant within a 90 day period.
2. Employers not carrying out a fair and reasonable selection process - for example, not properly pooling people when choosing which people to make redundant.
3. Employers making people redundant where the reason does not genuinely relate to redundancy.
From my perspective a key variable in not working things out is in the inability to accurately read and understand the staff. It is not just the law but the way the staff are handled. These issues are covered in my firm's mediation services.