Alternatives to Redundancy by Ellen Singer, Legal Services Consultant

Peninsula Team

October 21 2009

Many companies have had to respond to the recession and whilst many have been forced to look at redundancy, some employers are just not sure what alternatives may be on hand. Remember, the Peninsula Advice Service is available 24 hours a day, 365 days a year to respond to your needs. So just call 0844 892 2772 and one of our consultants will be able to go through the alternatives for your business. The challenge for companies during a recession is to ensure that in resolving short term problems they don’t forget long term considerations. It is all too easy to find that, having cut the workforce, you no longer have access to the necessary skills to respond to demand when it returns. Redundancy is a well known tool for dealing with economic pressures. However, it isn’t always the best tool in the circumstances. The reason for having meaningful consultation on potential redundancy is to see if there are any valid alternatives. If you are in the position where you need to re-evaluate the company’s current position then start by looking at your actual needs. Has the need for work of a particular kind ceased or diminished or do you just need to reconsider how they carry out this work at the moment. Nobody likes having to make decisions that will result in employees losing their livelihood through no fault of their own. Additionally, you don’t want to lose valuable staff members if there are any other viable alternatives. It is, therefore, necessary to consider all the options before going down the redundancy route. In order to properly consider your options you need to start by working out what it is that you need to achieve. Once you have your goal in mind then you can identify the methods of working towards it. Are your considerations being driven by a need to cut costs or because the work has reduced? You will then consider the necessary options to achieve your objective. In many cases it may well be that you have a combination of goals Do you need to look at reducing the amount of hours worked by your workforce? This may not necessarily require you to reduce the size of the workforce. The place to start in this situation is by reducing or stopping overtime. Consider if you would be able to carry out all the work without the need for overtime by rearranging the hours of work so that you only have people in when you need them. If you are still in the position of having more contracted staff hours than you have work for then you need to consider if this is likely to be a short term problem. See if your contracts allow you to place employees on lay off or short time working. If you don’t have that right within the contracts then talk to the workforce about varying the contracts to allow these options. These options allow you to temporarily reduce the number of hours worked by your workforce without losing anyone you will need when business picks up again. You can also ask that any members of the workforce who would like to consider part time working come forward so that you can discuss that with them. Consider the different distinct services that you provide within the company. It is worth investigating if any of those services can be provided to the same or better standard by an external provider. Do remember that if you decide to outsource any work then you will have to consult with any affected employees about a possible TUPE transfer. Look at possibly renegotiating contractual terms so that the work can be carried out more cost effectively. Contracts can have terms that give increased rates for overtime or antisocial hours because it was hard to recruit staff to work those hours. This may well be an appropriate time to reconsider contractual terms with a view to harmonisation so that all your employees get the same pay for the same work. Remember, if you are a Peninsula client call through to the Advice Service on 0844 892 2772, where one of our consultants will be able to help talk you through your alternatives to redundant. Ellen’s Top 5 tips:
  1. Work out what it is that you’re trying to achieve
  2. Consider stopping overtime or rearranging the working day
  3. Investigate lay-offs, short time working or employees going part time
  4. Could the work be outsourced and carried out more cost effectively
  5. Look at renegotiating terms and conditions

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