Date published: 01.09.08 - not release date

Credit Crunch could lead to more employment tribunals, says top employment lawyer

Credit Crunch could lead to more employment tribunals, says top employment lawyer

As the downturn in the financial markets leads to inevitable job cuts, claims of unfair dismissal are likely to increase, say specialist employment solicitors Glovers Solicitors LLP.

“Unless the correct procedure is followed when terminating a contract for redundancy as regards consultation, fair selection and dismissal, there's potential for a number of claims, particularly for unfair dismissal,” says Sikin Andela, employment lawyer at Glovers. “But even more pressing in the financial services sector will be clauses that require an ex-employee to remain outside of the stated industry for a period after the termination of their contract. Employers need to be aware that such clauses may not be enforceable. The clause must be narrow enough clearly to protect only the employer’s legitimate interests. In fact, case law has actually shown that tribunals treat these issues on a case to case basis. Employers should be aware that they may be challenged.”

Andela goes on to add that “any clause which prevents a senior manager from taking their colleagues with them when they leave should be enforceable. However, although an employer should also be able to insert a valid clause to prevent clients from being poached, nothing can prevent them from leaving of their own accord.”

As firms shed jobs across the financial sector, it seems highly likely that the coming months will see a big increase in cases around these issues. The advice from Glovers is that it will be vital that employers are confident about their employment contracts and their dismissal proceedings. “Redundancy is a valid reason for terminating a contract, but if the process they follow is not correct or important clauses have been excluded from the contract, they should be prepared for tribunals,” adds Andela.

Rory Blyth
BlueSky PR
www.bluesky-pr.net
Tel: 0845 130 8291
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