Is redundancy the only option available?
Is redundancy your only option?
When times get tough in your business, you may start to consider having to make some of your employees redundant. This will never be an easy decision for any business owner and nor should it be.
Redundancy is of course a permanent move and so you will want to be absolutely certain it is the right thing to do before you say goodbye to experienced and skilled employees.
Before a decision is taken to make any employee redundant, you are obliged to give full consideration to alternatives as part of a ‘fair redundancy procedure’. Let’s explore what these may look like.
Freezing external recruitment
It goes without saying that if you are considering redundancies in your business, it makes sense to halt any current external recruitment whilst you do it.
Yes, you may be making redundancies in a different part of your business to where you are hiring, but you will need to look at other internal opportunities when you consult with those who are at risk of redundancy.
Look at whether you can fill any current vacancies by redistributing work amongst your existing employees or by accepting internal applicants.
Temporary reductions in benefits and or pay freezes
Consider whether it is possible to put a hold on an discretionary, non-contractual benefits currently being offered to employees as well as placing a freeze on any upcoming proposed pay increases.
Reducing other overheads
Before moving forward with compulsory redundancies, be sure to look at other areas of your cost base to see where else savings can be made. It may be possible to make savings by reducing the spend in other areas such as entertaining, events, freeze discretionary spending, travel etc.
Lay off or Short Time working
Laying off employees means that you do not provide them with any work or pay for a period whilst keeping them employed.
Short time working means providing employees with less work (and less pay) for a period whilst employees remain employed by you.
A contractual right to do either of these will need to be in place. If this is not in place, then any proposal to lay off or put employees on short time working will need to be consulted upon and employee agreement sought.
Are there any employees who would welcome the opportunity to have some time away from the business for a fixed period? Unpaid sabbaticals can be a good way to retain employees whilst saving costs. The employment contract will continue, and holidays will continue to accrue.
If there are other opportunities in different parts of the business, consider whether any of the at risk employees can be redeployed to other roles. Can they be re-trained to take up alternative positions?
If overtime is not guaranteed but optional, then consider freezing it as a cost cutting option. It may not be well received, so ensure to communicate well with employees and explain the rationale to avoid compulsory redundancies.
Rather than losing their job altogether, it possible for any employees to reduce their hours and pay and enter into a job share situation?
As you can see, there are a variety of ways for businesses to cut costs and try to avoid compulsory redundancies. However, if after exploring these options redundancy is still a necessary outcome, take care to follow the due process to avoid contractual breaches and protect your business from claims.
If you require any help and support with proposed redundancies in your business, please get in touch.