16 March 2001

Staff lay-offs can be full of legal pitfalls

FARMERS forced to lay-off staff as a result of the foot-and-mouth crisis could add to their financial woes if they fall foul of complex employment laws.

Kate Robbins, of solicitors Roythorne and Co, says the level of protection for an employee depends on their contract of employment. In the vast majority of cases, employees are well protected and could receive up to £51,500 compensation in the case of redundancy and unfair dismissal.

Farmers must, therefore, take care not to add to their financial burdens. "The situation with foot-and-mouth means that where a farmers stock is slaughtered, he may be able to argue that there are no jobs left for the farm-hand to do," says Ms Robbins.

"If the right to temporarily lay-off workers has been reserved in the employment contract, farmers can cut wages to a nominal £16.70 a day for the duration of the situation.

"But clauses dealing with lay-off are not common in employment contracts and, where there is no such express right, attempting to lay workers off in this manner would give rise to a right to resign and claim a redundancy payment and compensation for unfair dismissal.

"Compensation payments are based on a formula of one weeks wages for every year employed. On top of this initial claim there is also a compensatory award, the amount of which depends on how long the employee takes to find another job."

Foot-and-mouth serves to highlight potential redundancy issues. But whatever the reason for terminating employment, an employer will have to go through a consultation period before making a dismissal.

"In the event of a dismissal, the employer has to serve notice on term of employment with the requirement that they act fairly. Criteria include consulting with employees, considering alternative employment and allowing for a period of time for the employee to make a representation to the employer." &#42