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As Tesco announces job cuts, Howarths consider a business’ legal obligations when dealing with redundancies

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Tesco has announced plans to cut 1,700 jobs from its branches and warehouses as part of its turnaround strategy. This decision will see the total number of job cuts made by the company since 2014 rise to over 10,000.
Despite holding the accolade of the UK’s biggest supermarket chain, it is clear that Tesco is not immune from the very real commercial pressures that all UK businesses face and has to strive, like others to keep ahead of its rivals in order to remain competitive and economically viable.
Regardless of Tesco’s size and administrative resource, in the event that it moves forward with its recent proposal to reduce staffing levels, the company will still be obliged to adhere to the provisions of the same employment laws that apply to all businesses in the UK, including those in the SME bracket, in doing so.
Although Tesco has not revealed its specific plans it is likely that the company will be gearing up to follow a collective redundancy consultation process with the affected staff members. Generally speaking, any employer who proposes to dismiss as redundant more than 20 employees within a period of 90 days or less is obliged to follow a robust consultation process with affected staff members and take reasonable steps to find an alternative to redundancies which may include other suitable employment. An employer of any size which fails to adhere to its legal obligations in terms of a redundancy consultation process will expose itself to legal risk, including that of unfair dismissal the liability for which can be up to one year’s salary per affected employee.
Dismissing employees on grounds of redundancy can sometimes be a costly exercise with eligible employees being entitled to both a redundancy payment and a notice payment. Both payments are calculable with reference to an employee’s age, salary and length of service. Upon termination employees will also be entitled to any outstanding but untaken holiday pay.
Here at Howarths we pride ourselves on providing expert legal advice on all employment law matters including redundancies to the SME market and we have significant practical experience in dealing with and advising on corporate restructures, cost cutting, turnaround and recovery exercises and helping businesses respond to annual increases in National Minimum and Living wages. In the event that your business requires support which may involve a reduction in employee headcount then feel free to contact a member of team on 01274 864999. Further details of all of our services can be found on our website:

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