Prices are going up. Bills are going up. Inflation is at its highest point since the early ‘90s. The 103% increase in planned redundancies seems to be a desperate cry for help from UK businesses.
Redundancy is a decision laced with legal risks, so it should always be a final resort. Or, you could become a target for unfair dismissal and discrimination claims.
To stay protected, make sure you’ve explored all other options first. If you don’t know where to start, here are four considerations that could make redundancy redundant…
1. Cut unnecessary expenses
You might be overspending. Think about what your company needs to spend versus where it could cut spending. Here are some ideas:
- Can you cut back on staff perks or replace with cost-effective alternatives?
- Can you review contracts with suppliers to see if you can reduce costs?
- Do you need a permanent workspace if most people can work from home?
Re-evaluate your outgoings and see where there’s an opportunity to reduce or eliminate costs.
2. Restrict or ban voluntary overtime
You might offer your staff extra pay for working overtime. Consider whether you could end or restrict this.
Do you require your staff to work overtime? Or is overtime voluntary? To find out, you’ll need to check your employment contracts. The contract will determine whether your staff are entitled to compulsory or voluntary overtime – as well as the rates of pay.
If the contract specifies that staff can work voluntary overtime, they aren’t obligated to work extra hours. If the contract specifies that overtime is compulsory, then you’ll need to check whether this is guaranteed or non-guaranteed.
Overtime might be a necessary part of the job role. If the contract mentions ‘guaranteed overtime’, you have to offer overtime to staff and they have to accept it. If they don’t, they’d be breaching their contract and you could take disciplinary action. If the contract says ‘non-guaranteed overtime’, then you don’t have to give staff overtime - but they should expect this could be the case, perhaps during busy times of the year. And if you do request it, they’ll need to work it.
If you want to ban or restrict overtime in your workplace, you’ll need to address this carefully with staff. Explain that it is a necessary measure to avoid making redundancies. You’ll also need to consider how to manage workers who rely on their overtime pay.
Remember, you can’t discriminate by allowing some staff to work overtime and not others.
If your contract entitles your workers to paid overtime and you want to change this, you’ll need to update it.
Need to update your contracts?
Your employment law experts will craft up contracts and policies for you to keep you up to date and safe from legal risk.
3. Introduce flexible working
Allowing staff to work flexibly on a temporary or permanent basis may help to reduce costs. Flexible working can include:
- reduced hours – asking staff to work reduced hours or days
- working from home – allowing staff to work from home can reduce the costs of running a workplace
- job sharing – allowing two employees to share the responsibilities of one full-time job
If you want to set up a flexible working arrangement with staff, you’ll need to get their permission, and they’ll need to sign off this agreement. Or they might accuse you of breaching their contract.
If flexible working is a permanent change, you’ll need to amend your staff contracts.
4. Consider pay cuts
If you’re unable to save costs elsewhere and the situation is bad enough, you do have the option of reducing your worker’s pay. But you would need to get their consent to do this. Sit down with them for a one-to-one and explain that a pay cut is necessary to avoid redundancy. Your staff might be willing to accept this if losing their job is the other option.
If they do accept this, you’ll need to get them to sign this off in writing. You’ll also need to agree on whether this will be a temporary or permanent change. Then, you’d need to update their contract or draft up a new one.
If they don’t consent to a pay cut and you reduce their pay automatically, you’re liable for breach of contract and deduction from wages claims.
If you want to make a change to your worker’s pay, you should seek advice on how to do this in a way that reduces legal risk.
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Redundancy doesn’t have to be the only way out. Remember, your Peninsula advisers work around the clock to offer expert advice to help you overcome any HR challenge. And if redundancy is the only way forward, they’ll make sure you follow the right procedure to stay safe from legal risk.
Whether you need redundancy advice or experts to update your contracts, don’t hesitate to get in touch.
Or, if you’re not a Peninsula client, get a quote to start accessing unlimited HR support today.
