Don’t let the economy get you down

14 Mar 2012
Alasdair Taylor

In a tough economic climate, disputes between employers and employees become more common.  Redundancy programmes and other forms of employment termination are a major cause of disputes.  According to the Chartered Institute of Personnel and Development, many private sector companies were planning on making redundancies in the first quarter of this year. 

As the UK economy enters another period of uncertainty, it might be a good time to be thinking about some of the measures that could be taken to avoid employee grievances further down the line.

Reducing costs, increasing solidarity

It is worth thinking about measures you could implement now to cut costs, thereby avoiding redundancies when times become increasingly tough, and being clear on what procedures to adopt if you are forced to make redundancies.

Some cost-cutting measures that you may want to think about include reducing or postponing the recruitment of new staff/employees, reducing working hours of employees (maybe a four-day working week instead of five) and freezing or reducing salaries. Furthermore, you could look at flexible or part-time working hours and job shares.

That said, it is important to be aware that any changes to contracts of employment require agreement by the employee. You must not impose changes unilaterally, although the contract of employment itself may afford you some cost-cutting measures. For example, the option to reduce or stop overtime hours or paying the same as the normal hourly rate. It may be that you could lay off staff on a short term basis. All of which may be provided for in the contract.

Communicating and consulting with staff about changes may enable them to see the process more positively than if they feel ‘unheard’ in the workplace.

Get to grips with redundancy

Should you find yourself facing the task of making redundancies, familiarise yourself with the statutory guidelines for redundancies (that way you will avoid potential unfair dismissal claims). You should think about each of the following:

  • Identify a redundancy situation and decide how many redundancies are necessary
  • Identify a selection pool and criteria and list alternative roles
  • Hold a first meeting with affected employees
  • Issue an “at risk” letter
  • Score each employee against the criteria (2 managers are required)
  • Provisional selection letter
  • First individual consultation meeting
  • Follow up
  • Second individual meeting
  • Dismissal letter
  • Appeal

So, lots to think about and lots to do. What measures are you taking to prepare your business?

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