The insurer said redundancies can lead to a leap in this type of claim

Hiscox warned that it has seen a threefold rise in insurance claims over the last quarter from employers being sued by former employees for ‘unfair dismissal’.

In particular, Hiscox found that businesses which are not following the correct statutory procedures when it comes to making employees redundant leaves them exposed to significant claims.

Making an employee redundant requires strict adherence to recognised procedures if a business is to protect themselves from suffering the consequences of a disgruntled employee, said the insurer.

A former employee might claim discrimination on the basis of race, age, or gender and could perceive the redundancy process as having been unfair to them.

According to Hiscox the top three claims are:

Failure to follow collective consultation procedures and obligations – necessary where 20 or more workers are at risk and are proposed to be made redundant within a 90 day period

Employers not carrying out a fair and reasonable selection process – for example, not properly pooling people when choosing which people to make redundant

Employers making people redundant where the reason does not genuinely relate to redundancy.