EMPLOYMENT specialists at Birmingham law firm Browne Jacobson say they have seen the number of local businesses seeking advice on how to carry out redundancies double recently because of the impact of the credit crunch.
The firm, based in Victoria Square, said it believed new employment laws, driven by EU directives aimed at stopping age, racial, gender and religious discrimination, were giving employers difficulty and making them contact legal advisers before they considered redundancy programmes, given the growing likelihood of a long-term economic downturn.
James Tait, an employment specialist at Browne Jacobson, said calls from employers for advice on job cuts had doubled compared with six months ago. “Despite jobless figures now edging towards the two million mark it looks like we will see this trend continuing for many months yet,” he said.
The employment outlook has deteriorated rapidly as the credit crunch and dwindling consumer confidence have begun to hit a range of business sectors in the West Midlands. With the latest jobless total in the West Midlands rising to 170,000, Browne Jacobson said the threat of further redundancies is no longer limited to the financial services sector, but has entered the ‘real’ economy.
Job cuts have been on the rise in recent weeks as the economy continues to stagger towards a recession.
The Engineering Employers Federation, representing more than 6,000 mainly small and medium-sized manufacturers, said the number of calls to its helpline for advice on staff cuts and shorter working hours had shot up “significantly” in recent weeks.
“Employers will have to be more careful about how they choose workers for redundancy this time,” said Mr Tait.
“People are much more savvy about their legal rights now compared to previous recessions. This, coupled with the raft of new legislation, really puts the onus on employers to ensure they are taking all the right steps to stay within the law when seeking to make staff redundant.
“On the positive side, we are seeing that more businesses are taking advice early and exploring all of the options to redeploy people wherever possible before hitting the ‘redundancy’ button. Wherever possible, the redundancy process should be both open and measured, where all available alternatives are considered. We are seeing more employers doing the right thing such as talking to skilled employees about more flexible working, considering agency workers to cover difficult spells, and using their retirement procedures as a way of keeping numbers within workable limits.”
Browne Jacobson said it was also concerned that businesses which do not take advice early in the redundancy process could fall foul of the raft of age discrimination and sex discrimination legislation that has seen a rise in this type of dispute in recent years.
But Mr Tait said it was not just younger workers that needed to take legal advice if they were made redundant. He said younger workers might also be able to claim that they have been discriminated against on age grounds.
He said: “The age old redundancy formula of ‘last in, first out’ risks falling foul of age discrimination laws, and targeting older staff for redundancy who may have valuable skills to get businesses through the hard times, can be costly. “