Statistics published recently by the Employment Tribunal service revealed that Tribunal claims arising out of an employer's failure to consult with employees over large scale redundancies increased by a staggering 150 per cent.

It is a timely warning to businesses squeezed by the recession who try to save costs by cutting jobs. There is a very real risk that failure to follow the correct procedures for making employees redundant will result in the company being on the receiving end of an Employment Tribunal claim.

Under employment law any employer who intends to make 20 or more employees redundant within a 90 day period (known as a "collective redundancy") must consult employee representatives about the proposed redundancies. Tribunal claims for an employer's failure to consult in a collective redundancy situation can prove costly for employers as Tribunals can award up to 90 days gross pay for each redundant employee. In one Employment Tribunal case involving Campbells, a failure to consult employee representatives over the closure of one its factories led to an award of more than £400,000 being made against them.

The procedures for collective redundancies are complicated and highly prescriptive. Therefore, legal advice should always be sought when contemplating large scale redundancies.

The procedures place an obligation on employers to consult with employee representatives over:

• ways and means of avoiding redundancies
• reducing the number of redundancies
• mitigating the consequences of the redundancies

If the employees at risk of redundancy are in a group in respect of which a trade union is recognised, the employer must consult with the union's representatives. In other circumstances, the employer should consult representatives either elected directly by the employees for the purposes of the redundancy consultation exercise or who are members of an existing body of employee representatives (for example, a work's council).

In a tough economic climate when many businesses want to act quickly, following a time-consuming collective redundancy procedure is not an attractive option. However, the sharp rise in Tribunal claims demonstrate that in the long term it could be time well spent, as it will reduce the likelihood of the employer having to defend a large and costly Employment Tribunal claim.

Tom Sharpe is an employment law expert at Howes Percival LLP in Norwich.