01/12/2008

Employment e-Brief – Alternatives to Redundancy

Digging Deep

Wherever we look at the moment we are constantly reminded about the onset of the R-word. But for many of our clients it in not only the blackening clouds of a recession they need to contend with but also that other R-word, redundancy.

Whilst in most cases the impact of one inevitable leads to another, recently we saw a fine example of how commercial astuteness, staff willingness and carefully crafted employment changes can help break, at least for the meantime, the bond between recession and redundancy.

As has been highly publicised, more than 2,500 workers at JCB, the construction equipment manufacturer, opted to accept a pay cut and reduced hours to save jobs. The proposal, which came on the back of deteriorating sales and redundancies of 400 staff in the summer, will see workers reducing their working week to four days, losing approximately £50 a week in pay but in return, the promise of 350 workers keeping their jobs.

Such changes are not just limited to manufacturing firms; practical measures are being taken in the City where modification to working hours and pay are smoothing the effect of tougher times. To this end, employers, employees and their unions are seeking commercial solutions as alternatives to redundancy and everything that comes with it. Many of our clients are looking at such alternatives to see if they can weather the storm whilst keeping their valuable workforce together.

The benefits of avoiding redundancy go beyond the trimming of a work force to cater for different climates. The cost of a commercial solution could be below that of a program of redundancies and by keeping staff, employers maintain the skilled workforce in readiness for when business picks up. More so and to quote JCB’s CEO “The ballot result shows the tremendous unity amongst the JCB workforce and a great team spirit”. Clearly where there is opportunity for a redundancy situation to be turned into a positive, that chance should be taken.

Underpinning these measures, in particular changes to hours and pay, is a fundamental alteration in the terms and conditions of a contract of employment and certain procedures must be followed to make these effective.

If you would like practical advice on alternatives to redundancies or further details on how to effectively make changes in an employee’s terms and conditions please contact one of the Gordons employment team.