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Redundancy Rise Predicted as Employers Face Recession

Employers are bracing themselves for a surge in redundancies in the next year in order to cope with the expected onset of recession, according to a new survey carried out by the Chartered Institute of Personnel and Development (CIPD) and KPMG.

The survey, conducted among 721 UK employers, makes for grim reading. Employers who were holding off making redundancies have reconsidered their position as a result of the deteriorating economic situation. 26% of responding employers reported having contingency plans to make further redundancies in the next 12 months in addition to those already planned.

The survey suggests that managers, professionals and skilled non-manual workers are most at risk of losing their jobs. Moreover, one in five employers say that they will 'more vigorously' enforce the default retirement age provisions contained in the Employment Equality (Age) Regulations 2006. This allows for the retirement of employees who have reached the age of 65 by following a defined procedure.

However, the survey also identifies a possible financial incentive for employers to limit the number of job losses: every employee made redundant costs the employer on average £10,000.

Employment law specialist at Frettens Solicitors, Kate Fretten says “It is crucial that employers follow the correct procedures when making redundancies or risk it costing them a lot more in employment tribunal claims. Getting redundancy dismissals wrong can be costly at a time when resources are stretched and taking advice before embarking on that course of an action can be extremely cost effective.”

Frettens Employment Team provide an inexpensive redundancy package which includes an initial advisory meeting, a step by step guide to the correct redundancy process and template letters. Contact Karen Worth on 01202 499255 for details or to set up an appointment.

The Frettens Annual Employment Seminar was held in October on 'Managing Change'. Comprehensive handout notes from the seminar are available, free of charge, if the subject is of interest.

The content of this article, blog or video is not intended as specific legal advice. For tailored assistance, please contact a member of our team.

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