News and Press
Failure to win Employment Tribunals brings greater costs to retailers

The retail sector has been very hard hit during the economic downturn and there are few businesses within the retail supply chain that haven't made some part of their workforce redundant.

As a consequence it is not surprising that the volume of Employment Tribunal claims related to unfair dismissal have recently rocketed. However, Stuart McBride, head of TLT's Employment team highlights the average cost of a successful claim against the employer is also increasing.

Stuart explains: "The main part of the award to the employee is a compensation payment to take account of the likely period the employee will experience loss of earnings. Due to the unfavourable outlook for jobs in much of this sector, compensation payments are tending to be significantly greater, acknowledging that the time for the employee to find a new job is expected to be longer".

We are aware of a number of retailers attempting to save revenue by cutting their workforce or compulsorily changing employees' terms and conditions of employment. When the number affected reaches 20 employees (at one site) or more, even in respect of just changing terms and conditions, then important additional rules become applicable such as consulting trade unions and employee representatives.

Stuart warns: "Simple errors in the wording of communications such as saying at the outset that redundancies have been 'decided' on rather than are just 'proposed', can mean the difference in the employer being liable or not".