 Can't get redundancy insurance? [Press Release]: There are quite many people in worried about holding onto their jobs nowadays. According to the Telegraph, unemployed Britons may reach 2 million in 2009. The paper urges workers to make use of all their legal rights if they are faced with redundancy.
The paper also suggests that workers use their insurance if an employment dispute does arise. It points out that for £20 or less, Aviva, Direct Line and LV= provide this cover as an add-on to their standard home policies. Employment dispute insurance is usually offered as part of a package that covers legal expenses relating to a home, like property disputes. The cover amount, however, varies among insurers. Direct Line provides up to £100,000 towards legal expenses in the case of an employment dispute, while LV= provides £10,000,000. To make use of it, legal proceedings must be initiated within 90 days of being made redundant.
One might wonder how useful such cover really is. The Department of Trade and Industry reports that 75% of employment disputes are settled before they reach the courts: which means relatively few policyholders actually make claims. It notes that the average court cost to the employer in the case of a dispute is £9,000, and a little less to the employee. The DTI takes a fairly negative view of going to court to resolve such cases, it has to be said. Many of the claims, it asserts, are unreasonable. Also, it stresses the fact that court procedures strain the resources of all parties, particularly the employee.
The DTI also highlights several important facts for people considering taking their employers to court to bear in mind, especially if their employers are large companies using high-profile solicitors. Litigants need to be aware that even if court costs are covered, the process is bound to be long and compensation may be lower than anticipated. If the case is lost, the entire exercise is futile.
The best time to "ask for more" from an employer in the case of a dispute (as the Telegraph points out) may be during personal negotiations with the company. Making a fuss, or threatening to do so, may help to get a little extra into a severance package, without the inconvenience and uncertainty of going to court.
On the whole, though, employment dispute insurance is still valuable, perhaps not so much as a stand- alone product, but linked to other kinds of aforementioned legal cover associated with a home. †
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NCD News: Can't get redundancy insurance? - 26.11.08
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