What alternatives are there to redundancy?
Let’s go into a bit more detail and explore some of those alternatives to redundancy.
Seek government support
First, you should check and see if any government support is available. For example, during the COVID-19 pandemic, the government announced a Coronavirus Job Retention Scheme. This was designed to support businesses so they could continue to pay a percentage of wages despite interruptions to usual business activity.
Given that the purpose of this scheme was to avoid redundancies, it’s worth exploring if the government has any other schemes that could help you avoid this eventuality. You should also check whether your employees have “short-time working” clauses in their contracts. If so, you could potentially reduce their hours on a temporary basis.
If your contracts do not permit short-time working, then you could ask employees to agree to a temporary cut in hours and salary. This would naturally have to be negotiated with each employee. A more extreme version of this would be to offer your employees a period of unpaid leave. Some businesses that didn’t qualify for the Coronavirus Job Retention Scheme were forced to do this to survive the crisis.
Will your employees accept this reduction? If they understand that the motivation behind the change is avoiding redundancies, they may be willing. After all, it’s better than making someone redundant. This is where quality communication between employer and employee becomes very important.
There are other alternatives to redundancy such as restricting overtime, freezing recruitment, and withdrawing non-contractual benefits. Read on to see if any of these solutions would suit your business.
This is one of the most obvious things you can do to reduce staff costs. If you’re considering making team members redundant, it’s unlikely that your current working situation requires overtime. Keeping employees to their contracted hours and salary will help you stay on budget and avoid redundancies.
To do this legally, you should check whether your employees have a contractual entitlement to overtime. If they don’t, you can restrict this or remove it entirely to reduce staff costs. If they are entitled to overtime, you’ll have to get the consent of your employees to make this change.
This may be an unpopular decision, especially if staff members have come to depend on the extra salary that they receive for working overtime. To smooth over the situation, it’s best to explain the situation with openness and honesty. Employees will be much more understanding if they realise this measure is being enforced to avoid redundancies.
You should also reassure them that this is a short-term change: when the business is in a better financial situation, overtime will return.
If your business was in the process of recruiting new staff members, you should retract these offers. Explain that the business is in a period of economic difficulty and reassure candidates that you will contact them should the situation change in the near future.
When your business is experiencing the kind of problems that lead to redundancies, it’s best to freeze all recruitment for the time being. Instead, consider redeploying staff members that would otherwise have been targeted for redundancy toward new roles. Could they take over another position and keep their job? Although this might require extra training, it’s still probably cheaper than the process of inducting a brand-new employee into the organisation.
Of course, if their job description is intrinsic to their contract, this change will have to be negotiated directly with the employee. An employee who likes their current role may be hesitant to transfer to a new department or undertake new responsibilities. However, if they understand that the alternative to this redeployment offer is redundancy, they’re more likely to understand and agree to the change.
Withdraw non-contractual benefits
To reduce costs and save jobs, you may be forced to withdraw non-contractual benefits. These could include bonuses and other incentives. Ensure that these benefits are non-contractual, though. If they’re considered an entitlement as per the terms of your employees’ contracts, you’ll have to obtain their consent to withdraw them.
Although staff are likely to be disappointed by the loss of these benefits, you can assure them that this is a temporary measure only. Employees who appreciate the financial situation of the business should better understand why these measures are being taken.
What is the redundancy process in the UK?
If you’ve explored all of the above alternatives and you still need to make redundancies, it’s very important that you follow the correct process. This will ensure that you handle the redundancies as fairly as possible, and it will protect your business from problems in the future.
For large-scale redundancies, businesses need to meet certain legal requirements. Firstly, objective criteria should be used to decide which employees are at risk of redundancy. Then, employees must be told about the potential for redundancy. The reasons behind the decision must be explained, too.
Lastly, employees must be able to participate in a consultation process in which they can give feedback on the proposed conditions of their redundancy. This gives them the opportunity to make suggestions, for example, regarding the potential for redeployment.
Even when it comes to small-scale redundancies, employees could potentially appeal the decision. That’s why it’s important to make the process as fair and transparent as possible. If the process of making someone redundant is proven to be discriminatory, this could cause your business significant legal problems.
To ensure that you follow the correct redundancy procedure, UK, then read on. Here is the redundancy process step by step.
Warn employees of the risk of redundancy
First of all, employees must be informed that redundancies are being considered in advance. This is important not just because employees deserve a fair warning, but also because some employees may actually nominate themselves for redundancy.
This could make the process much easier! After all, voluntary redundancies are always preferrable to compulsory ones.
Of course, when you make this announcement, your employees are bound to respond with a certain level of anxiety. It’s a good idea to prepare the announcement and make it as thoughtful and sensitive as possible. You can achieve this by fully explaining the economic situation of the business and why redundancies are being considered.
Your employees will want to know that you have explored other options and that redundancies are not being taken lightly. You may find that they’re more understanding of your position if you explain the motivations behind the decision honestly and directly.
You should also anticipate your employees’ questions as much as possible. The less uncertainty surrounding the process, the better. Explain how employees will be selected for redundancy and give an approximate timeline outlining when these decisions will be made.
Identify the redundancy pool
Although there are no fixed rules regarding the identification of your redundancy pool, you will have to be able to prove that it was reasonable in relation to your specific circumstances. Otherwise, an employee could appeal your decision.
A good way to start defining your pool is to consider what particular kind of work is disappearing. For example, if your business remains in high demand, but nobody is using your telephone customer attention service, then it’d make sense to focus on employees whose roles belong to that department.
If the situation is less straightforward, you’ll have to think about the workload of each employee and the extent to which their responsibilities are interchangeable. You should also compare the terms of their contracts. Lastly, you may be obliged to speak to union representatives in the process of agreeing on the redundancy pool.
Decide on the redundancy selection criteria
When you have established your redundancy pool, it’s time to create the criteria you’ll use to decide who is made redundant. During discussions with your employees, you should have received some feedback regarding selection criteria.
The criteria you choose should be as objective as possible. It should also be measurable. This helps to limit the impact of personal opinions and potential prejudice. Every employee should be compared against the same standards. This will also make your decisions easier to account for.