GMB accuses employers of dirty tricks to skip redundancy payouts

UK firms are employing unscrupulous practices to push people out of the workplace and avoid redundancy costs, the GMB union has claimed.

The union told Employers’ Law that one major company is trying to force employees to sign away their redundancy rights by giving them the stark choice: sign up now or be sacked. Workers receive a cash lump sum of £8,000 to £12,000, claimed the GMB, as long as they sign an agreement that waives their right to a tribunal appeal and any form of redundancy payment.

Paul Maloney, senior organiser with the GMB, said some employers were deliberately ignoring proper consultation and selection processes, and drawing up hit lists of individuals to remove older workers and those with poor health records from the payroll.

“It is not redundancy. It is simply a way of saving themselves money and pushing people out of the door in a cheaper way,” he added.

Figures from the Citizens Advice Bureau, meanwhile, show that dismissal enquiries rose by 14% between April and December 2008 compared with the same period in 2007, largely because of questions about redundancy practices.

Speaking to Employers’ Law about these issues, Simon Bond, head of employment at Midlands law firm Challinors, said the firm is dealing with an increasing number of similar cases.

“A commonly used ‘trick’ is to lay off staff indefinitely in the hope that they will simply get alternative employment elsewhere and not pursue their legal entitlements,” he said.

Mike Emmott, employee relations adviser at the Chartered Institute of Personnel and Development, also said that compromise agreements and other alternatives to redundancy need to be better explained to show they are not necessarily so poorly-motivated as first appears.

“Compromise agreements, in particular, are a useful safety valve for the tribunal system and as a way for employers to resolve any tensions in a working relationship,” he said.

“They are often used where there is no obvious basis for a legal challenge but the employer wants to protect themselves, predict costs or part company with an employee on decent terms. It simply says: I will give the employee X thousand pounds and in return the employee will agree they are content.”