Are you Trying to Avoid Making Employees Redundant

Although redundancies often come to mind first when Companies have to reduce overheads in stringent economic times, it is not necessarily the wisest choice. By making employees redundant, a Company loses a vast resource of expertise and experience possessed by existing employees which will be costly to replace and may be impossible to replace in the short term when the economic climate improves.

One way to avoid redundancies is to change the employees’ terms and conditions of employment such as by introducing a three day week, making pay cuts across the board for everyone, cutting fringe benefits for everyone or even asking employees to work extra hours for existing levels of pay.

However changing existing employees’ terms and conditions of employment should be done by agreement and consultation if at all possible except in circumstances where agreement cannot be achieved.

All employees should be consulted and the proposed alternatives to redundancy explained in full. Some alternatives published in the media are for employees to be asked to work for no pay for a period or to take unpaid leave of absence etc. However, these alternatives would prove attractive to some better paid employees of large Companies.

Any agreed variation of the terms and conditions of employment must be in writing and signed by the employee. Notice must also be given by the employer to the employees in advance of any changes taking effect.

If it is not possible to reach agreement on changes in the employees’ terms and conditions, then it may be possible for the employer to serve notice of intention to change the terms and conditions of employment and to terminate the contracts of those who refuse to accept the changes. However, there are differing decisions on this point and it would be prudent for any employer to take legal advice before embarking on this course of action.

If you require any employment advice please contact Clare Suttill or James Couzens of Parrott & Coales LLP on 01296 318500 or e-mail law@parrottandcoalesllp.co.uk giving your name, address and telephone number.