Firms warned on legal backlash

Ian Truscott QC told the conference that over-reliance on legal definitions
and procedures is more likely to provoke an employee backlash than achieve

Truscott has appeared on behalf of employers in the European Court of
Justice, House of Lords and courts and employment tribunals throughout England
and Scotland.

Where a company intends to reorganise rather than downsize, he said, efforts
should be made to avoid unnecessary redundancies.

"Good industrial relations so often depend on the spirit of fairness
and understanding. Not every piece of advice, guidance or warning needs to be
trammelled within the small print of some procedure.

"Too often employers concentrate on strategies for raising productivity
with no commensurate increase in wages in tandem with a reduction in numbers,
rather than taking a creative look at other options. This can lead to
unnecessary job losses.

"In time this can lead to an ’employee backlash’ as predicted by
Stephen Roach, the American downsizing guru."

Truscott also urged HR practitioners not to allow accountants to dictate the
course of action.

"The accountant’s view does not necessarily include consideration of
the longer-term damage inflicted on a business if the workforce is demotivated
and destabilised through excessive job cuts."

Dismissing a long-serving employee unnecessarily during a temporary downturn
in business, he said, can end up costing an organisation many times what it
appears to be saving.

As well as the retraining of new staff when business picks up, direct
expenses such as redundancy payments are likely to be boosted by the
"inevitable" unfair dismissal claim. Indirect expenses will include
negative publicity and low staff morale.

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