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UK unemployment continues to rise with hospitality worst affected

The latest data from the Office for National Statistics (ONS) has revealed that the unemployment rate rose to 4.9 per cent in the three months to October 2020, with redundancies reaching a record high.

The research revealed that there were 819,000 fewer workers on company payrolls in November than there were at the beginning of the coronavirus pandemic in February

The hospitality sector was the worst affected, with jobs in the sector accounting for one-third of losses, followed by the retail sector.

Redundancies rose to 370,000 in the three months to October, with the Government extending the Coronavirus Job Retention Scheme, or Furlough Scheme, at the last minute, hours before the wage subsidy scheme was due to end on 31 October, before England entered its second national lockdown.

The ONS has stated that the 217,000 increase in redundancies was ‘unprecedented’ and increased the unemployment rate to 4.9 per cent.

There are expected to be further redundancies in the coming months, with the furlough scheme set to end in April 2021, as a recent survey of business owners indicated that seven per cent expected to make redundancies within the next three months.

Suren Thiru, Head of Economics at the British Chambers of Commerce, said: “The latest data confirms that coronavirus continues to weigh heavily on the UK labour market.

“While the furlough scheme will help safeguard many jobs over the winter months, with businesses facing the prospect of further restrictions and a messy end to the Brexit transition period, major job losses remain probable in the near term.”

Amanda Hyam, a Senior Associate Solicitor with Mander Hadley, who specialises in employment law, said: “It is important to remember that there are strict rules which all employers must follow when making redundancies.

“If an employer does not follow a reasonable procedure during the dismissal process, an employee might be able to take legal action against them and seek compensation.

“Although, employees must have held their job for at least two years prior to being dismissed, to earn the right to challenge their employer, there are a number of automatically unfair dismissals which do not require a set continuous service period.”

For more information on correct redundancy procedures and how your business can ensure it stays within the law, please contact us.

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Amanda Hyam

Amanda Hyam

Associate – Dispute Resolution / Employment
I have specialised in Dispute Resolution, Civil Litigation and Employment law for more than 15 years.  I understand how daunting the prospect of litigation can be and because of this I am always available to discuss concerns.

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