Partner Article

UBS redundancies: the verdict

James Hall, Associate at Charles Russell LLP, gives his take on the recent reducancies at UBS.

Traders at UBS were subject to a novel method of redundancy on Monday, when the bank chose to prevent them entering the offices by barring their door passes. On arriving at reception, an estimated 100 UK employees were reputedly ushered by zealous HR managers into adjoining rooms where they were dismissed, the first of 1,000 staff to be made redundant in the UK out of 10,000 globally. The bank alleged that its unique approach was the only way to prevent disgruntled employees from going on spending sprees with the bank’s money when they knew they would be being let go.

The financial implications of UBS’s strategy seem bewildering. The bank runs the risk of paying significant sums of compensation for a failure to follow prescribed redundancy legislation. In this situation, the law is clear that employers are under a strict legal obligation to collectively consult employees over a ninety day period, in advance of implementing any dismissals. A failure to do so can give rise to a potential unfair dismissal claim, with basic and compensatory awards available for successful employees in the High Court or Employment Tribunal. In this situation, UBS will have had to enter into compromise agreements with the traders to prevent the possibility of costly claims. No doubt they also needed to pay out impressive sums to encourage employees to sign the agreements, whilst funding consolatory Christmas shopping sprees off their premises.

This was posted in Bdaily's Members' News section by Charles Russell LLP .