Economic Uncertainty is Not a Valid Reason For an Employment Dismissal

Although the recession is ‘officially’ over, its ripples are still being felt. Coupled with that, the appointment of a new coalition government is sparking a renewed feeling of economic uncertainty as new policies are debated and new laws implemented. In times such as these, private and public sector organisations are increasingly keen to find ways to cut costs. But is economic uncertainty a good basis on which to force redundancy?

In order to make a single worker or a group of employees redundant, an employer must have good grounds to do so. It may be that the job is becoming obsolete or that there is simply not enough work to justify the employee’s position. But whatever the reasons, it must be provable. To cut back on jobs in anticipation of an event that may or may not take place is simply not acceptable.

In order to successfully implement redundancies, an employer must follow a procedural code. Failure to do so could result in the courts looking on him or her unfavourably if there is a challenge by an employee for unfair dismissal. To begin the redundancy process, an employer must first consult with representatives of the employees who will be affected or with the employees themselves. At this initial meeting, the employer must explain the reasons for implementing the redundancies and offer alternatives to job loss. With redundancies of up to 20 employees, employers must give a minimum of 90 days’ notice.

The employees then have a period of time in which to question, challenge or contest the decision. In this instance, the employer should try and maintain an ‘open door’ policy, accepting further consultations with union representatives of the employees themselves. In the event that alternative work is offered, this too must comply with certain strictures such as requiring skills already possessed by the employee and having a similar wage attached.

If communications break down between the employer and those who are to be made redundant, the employer could easily find that they are challenged with a claim for unfair dismissal. In this instance, the facts of the case will be laid before an Employment Tribunal who will assess it on its own merits. Should the reason for the redundancies be something as nebulous as a fear of economic uncertainty, then the Tribunal is highly likely to award in favour of the claimants and compensation will be decided on.

It is important that both employees and employers have a working knowledge and understanding of their rights and responsibilities to one another. In this way, most problems and grievances can be resolved positively and in keeping with government legislation. For example, just as it is an employer’s responsibility to inform workers of forthcoming redundancies, it is an employee’s responsibility to take up any problems pertaining to the situation and discuss them in a calm and informal manner.

While economic uncertainty may be a driving factor in many business decisions, it cannot be cited as a reason for dismissal. Redundancies can only be implemented if the employee is not able to carry out the required work or if the work is no longer there.

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