Redundancies: Have you considered all the options?
THE coronavirus pandemic has required employers to rethink all aspects of their business, including their practices, strategies and objectives.
With the government furlough scheme coming to an end on October 31, survival of the business beyond this date will be at the forefront of all employers’ minds, and they will need to think creatively about how to achieve this.
The last thing any business wants to consider is compulsory redundancies, and there are some practical considerations that can be made by a business before deciding to begin the redundancy process.
Self-reflection is potentially the most important step a business can take when exploring alternatives to redundancy. This step will inform employers on the current position of the business and will show them where they are in relation to where they would like to be.
Employers should assess the current spending of the business and think about whether any changes can be made to their current budget.
For example, are clients paying their invoices on time? Can any costs be saved through cutting down on electric, heating or maintenance costs? In other words, is the business paying out any unnecessary expenses that can be avoided?
Also, businesses should consider positive actions that can be taken to improve performance, such as cost-efficient methods of marketing that can be utilised to increase the customer base.
Another measure an employer can take to reduce the need for redundancies is to reorganise the workforce. Employees in a department that is struggling during the pandemic could be retrained and redeployed to areas of the business that are busier.
Recruitment can also be restricted to allow work to be redistributed among existing staff. This can not only save on recruitment costs but can also help keep staff motivated during the ongoing pandemic.
Businesses may wish to consider the possibility of implementing temporary reductions in working hours and pay. It may also be a viable option for your business to implement job sharing or flexible working.
Implementing these kinds of reductions will help to reduce costs for the business without the need for redundancies. It is important for employers to explain that the reductions are temporary and that they are a necessary evil to prevent compulsory redundancies further down the line.
It should also be noted that any changes to an employee’s terms of employment must be made by mutual agreement so a modification to the employee’s contract of employment will be required.
Employers may wish to invite employees to apply for voluntary redundancy. This form of redundancy is a lot less disruptive and demotivating and reduces the need to follow the compulsory redundancy process. However, generally voluntary redundancies will need to be incentivised to encourage employees to accept the redundancy package which is likely to increase short-term costs for the business.
There is no doubt that Covid-19 has launched businesses into unchartered waters. When navigating these challenging times, it is important to consider all options available before deciding which route is the best way forward.
Businesses that are able to adopt a little bit of creative thinking and adapt to the ever-changing circumstances will be the ones that are most likely to prosper beyond the pandemic.
Andrea McCann (firstname.lastname@example.org) is a partner at McKees (www.mckees-law.com) specialising in employment law