Posted on 23rd February 2009

Firms Urged to Check Rules on Redundancy to Avoid Financial Penalties

Darlington-based law firm Latimer Hinks, is advising businesses in the region to ensure they are up to date on the latest changes in redundancy law, to avoid facing severe penalties.

From February 1, a weeks redundancy pay increased from 330 to 350, and the maximum statutory redundancy payment rose to 10,500 from 9,900. This has now gone up by nearly 4,000 since 2000, when the statutory maximum stood at just 6,600.

These changes come at a time when the compensatory award for unfair dismissal has also risen from 63,000 to 66,200.

Nick Poole, Partner at Latimer Hinks, said: This means that businesses found to have dismissed an employee unfairly may be forced to pay up to 76,700 the compensatory award plus the statutory maximum payment.

In some cases, particularly those involving discrimination claims and whistle-blowing, there is no cap on the amount of an award that can be made, exposing businesses to potentially unlimited penalties. This makes it more important than ever, particularly in these days when redundancies are becoming increasingly commonplace, that employers always act fairly and within the rules.

Nick added: In these unprecedented economic times, it is likely a number of firms will need to consider reducing their workforce and for many it will be the first time they are dealing with this issue. Any employer considering a redundancy programme, or investigating a workable alternative, should seek expert advice to ensure they understand how much they need to pay and to avoid running the risk of penalties.

Employers faced with the daunting prospect of implementing redundancies can find out more about the procedures involved at a series of free breakfast presentations being held by Latimer Hinks Solicitors.

The 30-minute presentations will be held at Crabtree Hall Business Centre, Little Holtby, Northallerton, on February 24; Allen Sykes Chartered Accountants, 5 Henson Close, South Church Enterprise Park, Bishop Auckland, on February 26 and Darlington Football Club, Darlington Arena, Neasham Road, Darlington, on March 3.

The Bishop Auckland event will also include a talk by Robert Herbert, partner at Allen Sykes, on the tax implications of redundancies from the perspectives of employers and employees.

Each event starts with breakfast at 8.30am, followed by presentations at 9am and a question and answer session.

To book a free place, call Andrea Tobin on 01325 341507 or email [email protected]