Alternatives to redundancy
Employers should, wherever possible, seek to find an alternative way to deal with problems within their business other than through recourse to redundancy. This should start at a sufficiently early stage that strategies can be developed for managing the size and make-up of the workforce and ensuring that existing and future staffing needs are addressed. Employmentlawhelp and our team of Employment Solicitors can assist you in looking at some of the issues which you need to consider.
Making staff redundant is only one way of dealing with a reduction in work or over-supply within the workforce. A number of other strategies exist and these should always be explored before embarking on a either a programme of redundancies or even the making redundant of one member of staff.
One of the solutions is alternative work, and this is considered in some detail in the item Redundancy and Alternative Work to be found elsewhere in this section on this web site, and wherever this opportunity exists it should always be explored.
However, alternative work might not always be available and this is why as an employer you should have a strategy which does not simply address redundancy when it arises but which monitors the business and allows the employer to take proactive steps before redundancy or alternative jobs within the business become the only options.
So what startegies can an employer consider as an alternative to redundancy? They include:
- ending overtime - clearly an employer that is allowing some staff to work overtime when other staff are facing the loss of a job is facing an accusation that it is not adequately addressing the needs of the whole workforce. Overtime is a good way of dealing with short-term increases in workload and is a good way of managing the business pro-actively if there is a chance that there may be a future downturn in demand for work of a particular type. However, it must be made clear to those undertaking the overtime that this is the basis upon which it is being offered and that, as and when market needs change so will the availability of overtime. There may be difficulties that in some workplaces the skills that are required in the area where overtime is being undertaken do not exist throughout the workforce - and that those being made redundant are the ones who do not possess a current usable skill. However, this is where more flexible approaches to the work force need to be considered so that workers possess more than one skill that is relevant to the business.
- early retirement - if the work force has a number of members who are around 60, then offering them early retirement may be an option to compulsory redundancies and lay-offs. There are disadvatages to this in that the business could lose some of its more experienced staff and the terms of the early retirement would need to be made attractive to those being offered it. However, arrangements could be put in place, for example, where those who retire could offer their services to the employer following retirement on a consultancy basis either when the market picks up or to train other staff in dealing with the issues with which they dealt.
- natural wastage - not replacing staff who leave is a long-term solution to staffing problems that will normally only work where the employer knows that a down-turn is imminent. It is not a remedy that tends to be effective in relation to short-term problems. The main problem with relying on natural wastage is that during the period before the downturn there can be increased pressures upon the remaining workforce. Often, however, this can be addressed by offering short-term overtime or taking on temporary staff.
- ending temporary contracts - whilst temporary contracts are useful if an employer believes that a demand for additional staff is going to be short-term or is likely to be seasonal - and can be a useful tool in managing a natural wastage programme - keeping temporary staff on at the firm when other, permanaent staff are being made redundant is not a sensible startegy unless the temporary staff possess skills that the permanent staff do not have and could not easily acquire.
- retraining - employers should always be alert to the potential to retrain staff which is often far more cost effective than paying compensation to staff by way of redundancy and has a less demotivating effect upon all concerned. Retraining is something which should be addressed at an early enough stage for the training to be completed by the time the redundancies becomer an option. However, it is something which is mostly only of use to larger organisations who may have a number of different roles within the business whihc staff can perform. It is worth those who retrain keeping their original skill up to date so as to increase flexibility within the business.
- voluntary redundancy - another option to compulsory redundancy is that of voluntary redundancy. This is generally likely to have a less demoralising effect upon the remaining workforce and the pill can be sweetened so far as the redundant employee is concerned by offering that employee enhanced redundancy benefits. Note, however, that if an employee leaves in anticipation of redundancy but before a notice of redundancy has been issued, that employee will not be regarded as redundant and will therefore be unable to claim a redundancy payment.
- limiting external recruitment - it almost goes without saying that, unless there are specialist skills that are required, businesses should not be recruiting staff when other staff are being made redundant. Strategies which businesses may wish to consider here are, for example, retraining and internal recruitment to fill posts with the resulting gap being filled either from further internal recruitment or by asking exisiting staff to work overtime to fill the gap. Attention should be paid to the need in some industries to advertise externally and to appoint the most appropriate person to the role, whether they be external or internal.
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