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Legal warning over redundancy pay-offs
January 15 2009
SENIOR employment lawyers in Leeds are warning of a potential 'litigation time-bomb' as bosses rush through redundancy deals with fast-track settlements.
Legal warning over redundancy pay-offs
SENIOR employment lawyers in Leeds are warning of a potential 'litigation time-bomb' as bosses rush through redundancy deals with fast-track settlements.
Employers are said to be increasingly turning to compromise agreements to speed up the process of reducing staff numbers, which involve employees accepting a higher pay-off in return for waiving their right to sue for other grievances.
With a sharp increase in the number of such agreements being proposed, two of the region's law firms - Grahame Stowe Bateson and hlwMcCombie Commercial Lawyers - are urging both sides to make sure every detail is carefully checked, or risk serious consequences in future.
Employment solicitor at Leeds-based Grahame Stowe Bateson, Arthur Bateson, says he has seen a significant increase in the number of people being offered compromise agreements in recent months.
Rights
"Employees need to remember when they sign one of these agreements they are surrendering a wide range of legal rights," he warned.
"For example, if they are being bullied, harassed or discriminated against they would not be able to sue once they have signed.
He added: "While the bigger pay-off may be attractive, it's important to measure this against the potential damages you may be entitled to under another claim. The offer may not be as generous as it first appears."
Joan Pettingill, employment partner of hlwMcCombie Commercial Lawyers, which is also based in Leeds, has acted for a number of employers working through the redundancy process in recent months.
She said: "It's imperative bosses are aware that the simple act of offering a compromise agreement can amount to unfair dismissal. Compromise agreements can be a useful tool, but they are also another complexity that can lead to expensive headaches if they are not handled properly.
Guidance
She continued: "With clear, concise guidance employers can strengthen their business for the future without delay or excessive legal costs. Redundancy needn't be a minefield if companies take their time and keep all records up to date to avoid any potential litigation after a deal is signed."