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The Alternatives to Redundancy

In the current economic climate employers often are faced with the difficult situation of maintaining continuity within their organisation whilst being face with the need to reduce overheads, specifically their largest overhead – their staff. Whilst it may seem as if redundancy is the obvious choice, before you make such a vital decision, it is always useful to consider some of the alternatives to redundancy. Of course it must be noted that these measures are not suited to all businesses; however it may just provide you with a more commercially viable solution for your business other than redundancy itself.

The following are some of the numerous measures which you may wish to adopt:

  • Reduce the amount of agency staff you employ
  • Ask staff to work a shorter week or alternatively you could ask staff to take a sabbatical (paid or unpaid) for a set period of time
  • Ask staff to work unpaid so that you can freeze salaries to increase cash flow.
  • Alternatively perhaps ask staff if they are willing to take a reduction in pay or benefits.
  • Choose not to pay out discretionary bonuses
  • Ask staff if you can defer any guaranteed bonuses
  • Freeze recruitment
  • Perhaps appeal to those employees who would like to have more flexible working hours without it affecting their future training or prospects for promotion
  • Job sharing arrangements
  • Asking employees to take unpaid leave or to take their holidays during times where there is a decrease in work levels
  • Reductions in overtime allowances

These are just some of the alternatives to redundancy. Of course, before employing any of these measures it is important to not that you cannot implement any of these decisions without first consulting the employees’ concerned, to seek their agreement; as varying the terms of their contracts without their consent would amount to a fundamental breach.

Before making any changes, it is advisable that you seek independent legal advice in order to prevent you from being subject to potential claims.

If you have any queries about these measures or redundancy in general, please contact our employment department.

Raj Dhokia: r.dhokia@fgdlaw.co.uk