‘Unfair dismissal’ claims increasing
Small and medium sized businesses (SMEs) are facing increasing numbers of unfair dismissal claims after neglecting to follow the correct statutory procedures when making employees redundant.
Small business insurer Hiscox said the last quarter saw a threefold increase in insurance claims from employers being sued by employees for ‘unfair dismissal’.
Businesses making redundancies must adhere to recognised procedure, Hiscox said, or risk being taken to court.
Former employees can claim discrimination on the basis of race, age or gender if they believe the redundancy process has treated them unfairly.
Hiscox’s SME expert, Gary Head, said: “Many SME owners will not necessarily have lived through a recession where redundancy has been a fact of working life and are unaware of what they need to do.
“All businesses should seek professional advice when it comes to making redundancies or they might find that what started out as a cost-cutting exercise could cost them far more in the long run.”