AS JOB losses mushroom, employers are reneging on payoff promises which staff rely on to cushion the blow and keep the home and family afloat during the dark days of redundancy.
A chill will have stabbed at the hearts of many employees when they heard predictions that unemployment will reach 50 million worldwide, from the International Labour Organisation.
Closer to home, staff cuts continued last week, with the axe
falling at firms as diverse as engineering company GKN, DIY store Homebase and online retailer Shop Direct.
However, employment lawyers warn that more companies are reviewing the redundancy terms on offer to staff, with a view to slicing them.
Once you have worked for an employer for two years, everyone has the right to statutory redundancy pay depending on your age and length of service. But it is paltry.
Those aged 22 to 40 get one week's pay for each year of service up to a maximum, from this week, of £350. Those aged 41 and older get a week and a half, and the under-22s get half a week's salary.
However, the maximum you can receive is for 20 years' service, so the most statutory pay, even the over-40s can receive, is just over £10,000.
Not much of a cushion for anyone facing the prospect of months out of work. Many employers, therefore, provide their staff with more attractive redundancy terms, which can see them walking out with a couple of years' salary in their pockets.
Or at least this is what many staff believe. However, it is emerging that their right to this money may be built on shifting sand. Property adviser DTZ is the latest of a number of firms to hit the headlines for slashing their redundancy terms. It had previously offered one week's salary for every full year of service, but the company is seeking to cut this to £350.
A spokeswoman for DTZ said: "Like many other companies we have brought our redundancy compensation into line with the rest of the market by offering statutory payment terms."
The signs are that reneging on redundancy agreements is widespread in the recession-weary property world, but by no means limited to it. And according to Dawn Robertson, a partner at Edinburgh law firm Murray Beith Murray, there is probably little that employees can do about it.
Many employees will be dumbfounded to discover that these entitlements can so easily be taken from them. So how can employers get away with it, and what are your rights if you find yourself being shoved towards the door?
Robertson says: "You can only be made redundant if the employer has stopped or intends to stop the business for which you were employed, or to carry out that business in the place where you were employed, because a diminution of work has altered the requirements of the business."
Where the numbers are relatively small, individuals can be paid off without placing an undue strain on the business.
However, as Robertson points out, problems can arise when large numbers are forced to be compensated, as may be the case at Royal Bank of Scotland and the newly-formed Lloyds TSB HBOS group.
Robertson adds: "Banks generally have extremely generous packages in place. It will be interesting to see how or whether they cope financially with the likely large number of redundancies they may be required to make."
The grim reality is redundancy terms may not be contractual, and can therefore be changed at an employer's whim.
An employment contract is an agreement between employer and employee and is safeguarded by law. Neither party can change it without the agreement of the other.
This contract, or written statement of employment particulars to give it its legal title, will cover key terms such as pay, hours, holiday entitlement and termination or notice. But for other issues, such as redundancy pay, it is likely to refer individuals to the staff hand book.
Unfortunately, this handbook is a legal minefield, and may well not enjoy the statutory protection employees believe it to have.
Robertson said: "It's a grey area. And it will come down to the wording. It may be contractual, or it may not be, or it may be that certain aspects are depending on how they are worded, or the wording of the statement of employment.
"Some employers include an 'at our discretion' clause in the handbook, but this will not automatically get them out of jail for free."
If a company wishes to change an employee's contractual terms, then it must ask the employee to sign a new contract.
Robertson says: "When times are good the employee has the upper hand in the contractual relationship, but when the economy turns down then the employer has the upper hand. They may have no choice but to sign."
The alternative is to dismiss them, and immediately invite them to reapply for their job. If they simply dismiss them, they could be open to a charge of unfair dismissal, but by immediately offering to re-employ them, they circumnavigate this risk.
Where a company is taken over, staff are protected by the Transfer of Undertakings (Protection of Employment) 2006 legislation which means their terms and conditions must remain the same, and they cannot be sacked either immediately before or after the takeover.
However, there is an exemption to these protections, which means you can be sacked if economic, technical or organisational requirements dictate changes to the workforce.
Job loss perks
The HBOS redundancy package is typical of banks:&149 Staff are paid one month's salary for each full year with the company;
&149 Redundancy pay is capped at £150,000;
• They can take a redundancy payment and a salary-related pension at 50, although this will be cut for taking it early.
• They can keep a discounted staff mortgage for a year after leaving the company. If they take early retirement, they can hold on to the mortgage while in that current home.
