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Law firm to pay £20,000 for not giving proper warning of closure to employees

A tribunal found eight claims of unfair dismissal against a Newcastle-based law firm were well-founded as the company did not properly warn employees before liquidation.

Short Richardson and Forth traded for 44 years before closing its doors on 30 September 2022 and entered voluntary liquidation on 12 January 2023.

Of the 17 employees who lodged claims against the firm, 13 will receive financial compensation from £37.70 to £9,774.21. The total pay out amounted to over £20,000.

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The case is a reminder to always follow due process, according to Charlie Wood, senior associate at SAS Daniels.

Speaking to HR magazine, he said: “In this case, the employer should have started a process of collective redundancy consultation. 

“This would have involved informing all staff of the proposed liquidation, appointing employee representatives, and then consulting with these representatives on the proposed redundancy situation. 

“This could have protected the employer from having to ultimately deal with multiple tribunal claims.”  

Wood said that although communication easily breaks down during uncertain times, failing to consult or inform employees can be legally risky.

He said: “It is understandable when times are tough that some processes may be overlooked – but as this case shows, completely failing to follow any process can have a significant impact on the business and its employees. 

“This case should be a reminder to all businesses of the risks of failing to treat their employees properly. As with most issues, communication is key, and keeping employees in the dark until it is too late is not a sustainable way to run any business.”