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Redundancy: What’s the alternative?

25.03.2015

Many employers see redundancies as the only way out of economic difficulties that they face.  What many employers fail to consider is that these should be a matter of last resort and there are many other possible options open to them to avoid this process.  Below are just a few of the successful measures used by some of our clients to avoid redundancy consultation and pay outs.

Reducing headcount

In many organisations employee costs are the highest single item of expenditure.  The temptation is to cut headcount as a quick fix but such short term measures can affect the long term prosperity of the organisation.  Experienced employees are hard to replace and the whole process can have a very wide reaching effect on staff moral.  Alternatives to this are to consider restricting recruitment at an early enough stage to have an impact.  Alternatively, reducing non-permanent staff is often far simpler legally and much cheaper than addressing permanent employees or workers.

Re-deployment

Employers have also considered re-deployment and re-training employees to address specific needs in their business.  Although for the most part this can only be varied with the employee’s consent, employees may often consent to this rather than face the risk of redundancy.  It may also be worth considering discussion with all employees as to whether any have plans to retire in the near future.

Temporary stoppage

Temporarily stopping the work that is done is most commonly employed in manufacturing businesses. Although less common in the private sector, sabbaticals could be an option.  If employers have “lay off” clauses in their contract it enables them to lay off labour but then restore them when trade starts to pick up.  It is important if you choose this option that you have the relevant provisions in your contract.

Reduce working hours

Reducing employees’ working hours is usually a hard act to sell as it results in reduced pay and benefits.  It may be contrary to an employment contract and needs the consent of the employees in question.  Employers cannot go down this avenue without having the contractual right or express agreement of the workforce.  Here as in all these situations, the key is to have a full and frank discussion with the workforce as soon as reasonably possible.  Offering part time work as a way to avoid job losses with facts and figures to back them up and leadership examples of similar cuts may secure the employee’s consent.  In difficult economic climates employees may well agree to various options which they would not usually do in order that their job remains secure.

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