Many mortgage lenders and packagers have been forced to let staff go in a bid to cope with current market conditions. Only last week edeus and Kensington made 95 staff redundant between them, while GHL Group shut down Classic Network Solutions, inevitably heralding yet more.
Sikin Andela, employment lawyer at Glovers Solicitors LLP believes that whilst this is a tough time for all concerned, many employees who have lost their jobs may look to claim unfair dismissal.
“Unless the correct procedure is followed when terminating a contract for redundancy as regards consultation, fair selection and dismissal, there is potential for a number of claims, particularly for unfair dismissal."
Obviously adhering to procedure is key in the matter, however Andela feels that clauses which require an ex-employee to remain outside of the stated industry for a period after the termination of their contract, could prove problematic.
Andela continued: "Employers need to be aware that such termination 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.
In addition, Andela said: "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.”
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,” concluded Andela.
