Engineered redundancies a quick but risky fix for banks

eFC logo

If you are deemed a problematic employee at your bank, chances are you run the risk of an engineered exit.

A survey of HR professionals at 124 UK financial services firms has highlighted a growing problem in the banking sector: a full 70% of banks' HR professionals surveyed said that employees who lied, bullied or underperformed were a lost cause - and a third of those surveyed admitted to 'engineering' dismissals or redundancies to get rid of staff considered difficult.

The survey, conducted by law firm Halliwells and Personnel Today magazine, suggests such a quick fix is used instead of following correct but time-consuming procedures for dealing with difficult individuals.

But it also exposes employers to greater risk of losing an unfair dismissal claim at employment tribunal if a dismissal or redundancy is shown to be manufactured.

Stephen Hills, head of employment team at law firm Halliwells, says, "Engineering a dismissal without taking appropriate action is a dangerous practice which exposes businesses to the risk of costly and time consuming legal claims."

One human resources consultant, who asked not to be named, warned that some banks are aware of the problem and will go to great lengths to cover their tracks: "I have come across instances where entire teams have been deliberately restructured to create a redundancy situation to oust an individual," he says.

Roger Tynan, employment partner at Campbell Hooper Solicitors, believes such exits may be common practice: "I confess I'm surprised that the [survey] figure isn't higher. In my experience a significant majority of HR professionals at least consider using redundancy as a means of terminating difficult employees."

Often this is because HR departments are under pressure from managers for a speedy solution, in circumstances where the manager has either failed or been unable to manage the employee in question. The survey found, for example, that over half of banking industry employers said problematic employees took up a considerable amount of management time.

"Many HR professionals are instinctively uncomfortable with such an approach to managing problem employees out of a business and will buy their way out of the problem though a compromise agreement," says Tynan.

Effective performance management techniques need to be put in place to avoid the problem. Philip Beddows, director at HR specialists The Rialto Consultancy, believes HR and line managers should follow a more consistent appraisal system: "Employers sometimes give up on people because they have ducked rather than tackled the key issues."

Popular job sectors


Search jobs

Search articles