Legal Information Centre

11 August 2008 by Mary Heaney

Employment rights and the credit crunch

With redundancies on the increase, John McNeilly talks to employment lawyers about the effects of the credit crunch

With the ongoing impact of the credit crunch and the continual development of legislation, it is worth keeping up to date with the state of employment law and how current trends could affect you in your work. John McNeilly talks to employment lawyers about what to do if your job is under threat.


In the fallout from the current economic downward spiral, redundancies have become the most significant consequence for employment with figures only predicted to grow and spread throughout the job market.


Employment solicitors say few sectors will remain unaffected by redundancies. And a recent survey from the Chartered Institute of Personnel and Development (CIPD) predicts that a quarter of employers are planning redundancies during the present quarter.


As a consequence of the dire economic news, employment solicitors are giving more advice to employees made redundant who are unsure of what to do or are aggrieved by the process. But, says employment lawyer Richard Linskell of law firm Dawsons LLP, economic pressures have made such claimants more realistic about the level of compensation they could receive.


As the most prominent victims of the credit crunch, the greatest increase in redundancy work has come from the banking, financial and construction industries. However, according to Linskell, such cost saving tactics have also begun to spread to businesses that support the financial sector, such as those in IT. The retail sector is another which is feeling the pinch. Liesel Whitfield of law firm Irwin Mitchell has noticed more redundancy work from those in the leisure industry, such as night club workers.


Temporary workers are most likely to be dropped in the current economic climate and employment lawyer Jonathon Mansfield of law firm Thomas Mansfield LLP warns that recent case law has not been favour of such employees.


Redundancies will not necessarily be the only consequence of current turbulent economic conditions.

Whitfield says there is a limit to the amount of people who can be made redundant and suggests that eventually employers will make savings by changing work conditions such as by cutting benefits. Outsourcing work could be another means of making savings, a tactic which Jonathon Mansfield predicts will lead to a rise in TUPE-related enquiries, already an area of growth.


Personal injury experts meanwhile predict more stress-related claims as financial pressures take their toll on employees. As Richard Dugdale of William Sturges points out though, securing such compensation can be difficult as the threshold of proof is notoriously high.


Discrimination and harassment


DSM Legal employment lawyer Diane Massey says  that the rise in claims of discrimination and harassment demonstrates that “people are not only more aware of their rights nowadays, but are also more prepared to exercise those rights”. She has particularly noticed a growing tendency for women to seek advice about matters such as equal pay, sex discrimination and pregnancy-related dismissal.


For Irwin Mitchell’s Liesel Whitfield it is disability-related claims that make up most of her discrimination work, often, she believes, because employers do not realise that something is classified as a disability.


The introduction of age discrimination legislation also looks set to have an effect on the type of work received. Thomas Mansfield have received more of such enquiries and won settlements when proceeding with action.


What to look for when seeking advice from an employment solicitor


As is typical for all legal advice it is important to go to an experienced, accredited specialist and ensure that they understand your predicament.


Jonathon Mansfield emphasises the importance of getting advice early on, before taking precipitate action such as walking out. Problems can often be resolved at the nascent stages or through internal proceedings so that the individual can remain with their employer. Diane Massey also draws attention to the urgency of seeking advice by highlighting the short time limits for issuing proceedings in the Employment Tribunal.


Liesel Whitfield, however, warns that employees cannot pursue their rights until they have officially raised a grievance with their employer. Time can thus be saved by doing so before seeking legal advice. She says an employer’s grievance policy should be easily accessible for advice on how to raise such an issue.

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