Firms which avoid redundancies will be best placed for upturn, says lawyer
Organisations shouldn’t have to resort to compulsory redundancies to see them through the current recession, a Midlands employment lawyer has said.
Julia Fitzsimmons, an associate in the employment department of Black Country law firm George Green, said that by applying a little creativity, employers could find positive and proactive ways to avoid losing staff and incurring the significant costs involved in making skilled employees redundant.
“Redundancies are unsettling to the remaining employees and to customers and suppliers, while the negative publicity generated can also lead to doubts about the long-term viability of a business,” she said.
“Looking longer term when the economy picks up again, vital skills may have been lost, while additional time and money will have to be spent on new recruitment. Retaining skills wherever possible means that businesses will be ready to take advantage immediately in the upturn.”
She said that before making people redundant employers should first consider a number of cost cutting measures, adding: “There are many alternatives to compulsory redundancy. Hiring freezes, salary freezes, voluntary redundancies, temporary lay offs and short time working have already been effectively introduced by a number of employers, but it is important for employers to check the contractual position first, as any change not covered by the employer’s terms and conditions may have to be consulted on.
“This is also the case if employers reduce, suspend or remove benefits, including bonuses, when it is vital for an employer to be certain whether they are discretionary or contractual.”
According to the lawyer, more significant changes to the workforce, such as changing shift patterns, or introducing an annualised hours scheme, would definitely require workforce consultation. Miss Fitzsimmons added: “Most employees would prefer not to see compulsory redundancies in their workplace and some individuals could be in a better position to help. Some may agree to take sabbaticals or unpaid leave, while others could be seconded to clients or customers, who will take on responsibility for paying individuals without their skills being lost to the original employer.”
George Green will be outlining these alternatives to redundancy and how to implement them at two seminars for employers in Brierley Hill on April 22 and in Wolverhampton on April 30. “Too often redundancy appears to be the only way for employers to cut costs, but we felt that it is important to highlight other cost saving measures,” said Miss Fitzsimmons. “We will also consider how to keep employees incentivised at a time when there is no cash for pay increases or bonus payments.”