UK
Guest comment: the legal approach to redundancy
2 April 2008
Think you might be made redundant? Now's the time to start saving those emails, says employment lawyer Elaine Aarons.
Everyone in the City knows that economic woes lead to redundancies and the banking sector is being particularly hard hit in the current downturn.The latest figures from the Centre for Economics and Business Research suggest that up to 10,000 jobs could be lost in the City this year alone.
But in every round of redundancies, a significant percentage of employees are reluctant to just sign on the dotted line and accept their redundancy offer, especially if they feel their dismissal is unfair or unjustified.
First steps
If you are concerned about redundancy, the best precautionary measure you can take is to make careful notes of all conversations with your employer. It goes without saying that you should save all relevant e-mails or letters too. Amassing evidence is crucial.
This advice particularly applies to high achievers. Counter-intuitively, we are currently seeing some banks making their high fliers redundant. Speculation is that this way clients can be shared out amongst fewer players, thereby increasing profitability.
The first formal sign that you may be facing redundancy will be receiving an ‘at risk’ letter from your employer. Redundancy is not supposed to be a definite outcome on receiving such a letter, but it usually is.
In such correspondence, the employer typically explains that they are looking to deploy the ‘at risk’ employee to another department. As many banks have moved towards headcount freezes in the last few weeks, redeployment is not likely.
During and after a dismissal
Employers seem to be adhering more rigidly to proper dismissal procedures now, compared to during the last recession in the 1990s. It will thus be harder to bring a claim based on a procedural mistake, as fewer mistakes are being made.
However, this is not to say that unfair dismissals do not occur – employees are often made redundant in unfair or unjustified circumstances, even if the dismissal procedures are followed.
If you feel that you have been made redundant unfairly, you should ask to see the redundancy criteria that have been applied, and how individuals were selected for redundancy. Other than the counter-intuitive example of high fliers being made redundant cited above, we are seeing evidence of pregnant employees, or those returning from parental or sick leave, being made redundant. If you are made redundant in such circumstances, you may well have a claim for discrimination as well as unfair dismissal. Unfair dismissal claims are capped (currently at £63k). Discrimination claims, which are uncapped, can therefore be more valuable.
Making a claim
If you do feel that you have been unfairly made redundant, you should look into obtaining legal advice. It is likely that your claim will be settled by your employer, particularly if they are facing other similar claims. A good lawyer will be able to maximise the settlement you receive.
A word of warning though: steel yourself for a fight before making any claim. Whilst it is unlikely that your claim will go to a full employment tribunal, you are likely to have to go through either an appeal or grievance procedure, which is never pleasant. Allegations of underperformance are standard fare in the current climate and you will feel on the defensive when you want to be on the attack. You should be absolutely certain of your motives and objectives before seeking a legal solution, but there is no doubt that those who are tenacious do best.
Elaine Aarons is a partner in the employment team at international law firm Withers LLP. She specialises in acting for senior executives.
Dear ex-cap mkts. You have been through the wringer and I wish you well in your future away from such chicanery. You are so not alone here. I've mentioned elsewhere that I'm writing a book about our experience - but actually it's more of a guide. The real deal to working in a bank where profits really do mean more than people. Where ethics flew out of the window decades ago (but the bank's mission statements claim moral high ground). What happens when you challenge your situation, find out that dirty dealing is involved - find witnesses to prove it, fight it through the legal channels of Employment and Data Law. What happens to a decent joe doing a good job who gets shafted by a global bank. What you can expect. I don't think they'll like it much, but it has to be out there so people understand the real and murky world of working in finance. The fact they're in the mess they're in is, to my way of thinking, purely down to greed and a lack of decent management. Emphasis on the decent.
Jane 17 Apr 2008
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