In the current recession, both restructuring and redundancies are becoming increasingly common. Large and small businesses may find themselves with little option but to shed staff just to keep their business going. It is an extremely stressful time both for employees facing potential redundancy and for employers and other HR and other managers involved in the redundancy process.
Redundancies occur where a job no longer exists or can be dispensed with for justifiable economic reasons of benefit to the employer. However, for employers thinking about making redundancies it is worthwhile looking into alternatives. Employers can consider the following options:
a) Stopping the use of temporary staff — temps are often expensive due to the additional costs of using an agency and also maybe less productive than experienced staff. Can work be reallocated to existing staff instead?
b) Cutting workers’ hours
c) Offering sabbatical or unpaid leave
d) Reducing the level of paid overtime
e) Bringing in flexible shift patterns or annualised hours contracts
f) Replacing part of a worker’s salary with a performance-related bonus
g) Converting the remuneration of sales staff from salary to a commission basis, where possible
h) Developing new sources of work
i) Cutting out unnecessary travel by replacing face-to-face meetings with phone and web conferencing
Above all, when thinking about making changes to work as terms and conditions, it is essential for employers to talk to their staff and to both explain the current position and discuss with them questions of changing conditions rather than simply imposing those changes — which risks serious morale problems and legal claims for breach of contract. When carrying out such changes, those employers without their own internal human resources for legal staff will need advice from a specialist employment lawyer. Redundancy is a complicated area of law and too often employers wrongly use redundancy as the label for sacking employees. This involves significant risks for employers as employment tribunals are becoming very used to this trick and a claim for unfair dismissal claim can be very costly. Employers are well advised not to misuse the term redundancy, unless there is definitely a redundancy situation. Furthermore employers should make sure they know exactly what they are doing and that they follow the correct procedure.
Those employers who manage to apply some of these tips successfully to their own business should be better placed to survive and even thrive in the recession, be well placed for the recovery when it comes and in the meantime keep staff morale high.