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BETTER BUSINESS

Redundancy

alternatives

Economic dips come and go and in their wake busi-
nesses are left struggling financially. A number suc-
cumb to their wounds while others end up as
zombie companies unable to do anything other
than just about service their debts, by Adam
S stoppage of work where an employer
Bernstein
ome, however, bounce
back because they’ve taken makes lay-offs for a set duration until
proactive steps to manage
the financial position improves.
their position – part of
However, she warns that “unless the
which means controlling
or cutting costs.
implement layoffs then again it will
be necessary to consult with employ-
There are various cost-cutting employer has a contractual right to
measures that businesses can con- ees”.
sider, but one that lawyers are seeing Ian Steel, an employment law
much of right now is a focus on mak- solicitor at the BPIF, would advise
ing reductions to headcount. clients along the same lines.
However, to Chander’s list he would
Options to cut staff costs suggest that employers look at seek-
It’s a given that in some instances ing increased job flexibility as “staff
compulsory redundancies may be the usually agree to this is they can see a
only viable possibility. But it is also business is struggling”.
important to explore the alternatives On top of that Steel would recom-
if you’re looking for better long-term mend reducing wages. He would also
solutions. Tina Chander, a partner recommend a company restructure redundancies.
and head of employment law at or workforce planning as employers But following this path isn’t straightforward. Indeed, she notes that “the
Wright Hassall, has several preferred “can set out their ideal objectives employer needs to carefully consider whether the role the employee occu-
options that she advises employers from the start”. A restructure, for the pies is one that can be absorbed, has reduced, or is no longer sustainable.”
consider instead of making redun- record, is not the same as a redun- On top of that she says that “it is vital to remember that even if an alterna-
dancy as headcount doesn’t fall, it’s
dancies. just that staff work differently. tive cannot be found prior to a redundancy process being actioned, and
Top of her list is a recruitment Something else that employers employees are put at-risk of redundancy, the business should still continue
freeze “with a pause on taking on any could consider are voluntary redun- to consider alternatives throughout the entire process.”
more employees for a period of time dancies where employees leave Steel too sees merit in this course of action. But while he knows some
which could reduce financial outlay”. because they decide they would be companies prefer voluntary redundancies “to avoid a process that is inher-
Next comes a reduction in hours of happy to move on to pastures new, or ently unfair because people are losing their jobs through no fault of their
work with, for example, bans on even take a break from work. own”, he is aware of the risk “that the most experienced employees who
overtime or minimising working In this situation, Chander says that have the highest redundancy entitlements want to apply”.
hours and working days. But to do “employers should consider inviting On this he remarks that “an employer is not required to accept applica-
this, she says that “the business employees to apply for voluntary tions for voluntary redundancy and this should be made clear at the start”.
would need to consult with employ- redundancy” which would allow He adds that “if employers design the selection criteria based on objective
ees to see if they would be open to them the opportunity to do so “with skills and experience they want from the staff who remain, then the staff
such changes, whether temporary or an additional payment of redundancy with the best fit should be kept on”.
permanently; agreed changes should pay in addition to their usual entitle- Alternative roles
be confirmed in a contract variation ment of notice and accrued but
letter”. Alternatively, she says that unused holiday upon leaving their All of this means that ways to avoid redundancy should be at the fore-
employers could look to a contractual role”. In fact, she points out that if front of an employer’s mind throughout the process, including during any
right to implement short-time work- there is a good take-up for this employee’s notice period if their role is confirmed redundant.
ing. option, it could avoid a formal redun- In tracking this through, Chander says that avoiding unnecessary redun-
Her third option is a temporary dancy process and compulsory dancies means one of two things: either trying to find suitable alternative

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