A WIRRAL law firm is taking a proactive approach to guard their clients from legal pitfalls created by the credit crunch.
DGB Solicitors, based in Heswall, is going in-house with small firms to shore them up in case they need to make redundancies.
The move comes after LDP Legal revealed last week that employment lawyers across Liverpool are seeing a surge in demand for advice.
City companies looking at cutting costs are preparing to rein in spending by shedding staff.
But downsizing can be a thorny issue.
DGB’s head of employment, Paula McNamee, said: “Reducing the headcount is an unpleasant and disruptive experience for employers and employees alike, and employers need to ensure that they follow a fair and reasonable procedure.
“If employers fail to do this, they could face an unfair dismissal claim, which will include compensation for future loss.ŠThis could be big money, particularly in industries like construction or property, where it is likely to be increasingly difficult to find a new job in the current economic climate.�
Her tailored “prevention is better than cure� approach includes going direct to DGB’s clients and working with them in-house to review procedures and guide them through the redundancy process.
Government figures reveal the number of employment tribunals has rocketed in recent years.
There were 132,577 tribunal claims in 2006/07, up from 115,039 in 2005/06 and 86,181 in 2004/05.
The average cost of defending a claim is £9,000 and an award for unfair dismissal can now be as much as £72,900.
Ms McNamee said she had seen a significant increase in enquiries from companies about how to implement redundancies.
But small firms, in particular, might not have adequate procedures in place.
“In order for businesses to survive the credit crunch, it is important that employers think now about how to handle job losses,� Ms McNamee said.
Firms without a human resources department are especially vulnerable, she added.
There is huge scope for the unwary employer to get it wrong, including failing to warn and consult with employees about impending job losses, trying to rush through a redundancy programme, and failing to consider suitable alternative employment.
Ms McNamee said firms should be wary of having procedures that are not compliant with the age discrimination laws that came into force in 2006.
These make “last in, first out� policies increasingly open to a claim for indirect age discrimination as younger workers have not had the time to build up years of service.
Ms McNamee added: “An average time for getting an unfair dismissal claim before an employment tribunal is four to six months.
“This involves considerable time and expense in preparing for the tribunal hearing.�