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Redundancy, the right way - Avoiding Redundancies - Step 1

View profile for Jemma Bennett
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At Gepp Solicitors will be providing helpful tips and guides for employers who are having to consider redundancy.  

Are there other options that you can consider instead of redundancy to save costs? 

Of course, sometimes, it makes better economic sense to keep employees even where, cost cutting is needed.

So, what other alternatives can be considered?

  1. Reducing working hours or salary.
  • You could consider reducing the number of hours or days employees work, with a pro rata reduction in salary. 
  • You could ask employees if they would be willing to defer some or all of their pay.
  • In all cases, you will need the employee's agreement, you cannot just impose the changes and we would always advise that you get an employee's agreement in writing.
  1. Retraining
  • Consider whether you can retrain existing staff to fill other vacancies in another department.
  1. Recruitment freeze and withdrawing job offers.
  • You could simply not recruit anybody and take advantage of natural wastage, this saves on recruitment costs.
  • When it comes to withdrawing job offers, if the offer has not been accepted then, it can be withdrawn without the cost to the business.  If it has been accepted, then withdrawing can expose the business to making a small payment, but this is usually only for minimum notice.
  • Consider deferring new starters.
  1. Voluntary redundancies
  • Whilst voluntary redundancies are not a way of avoiding redundancies, if there are sufficient volunteers then you'll avoid having to go through the selection process. You could consider offering an enhanced package to volunteers to help employees come forward.
  1. Layoffs
  • Do you have casual workers and agency staff?  Often it is more effective and cheaper to lay these people off as an alternative to redundancy.
  1. Early retirement
  • You can sometimes offer this under a pension scheme to those who volunteer for redundancy.  Make sure that the retirement is voluntary.
  1. Ask your employees for suggestions.
  • Lastly, ask employees to suggest alternatives for redundancy, you may be surprised with what they come up with and, it will make them feel involved in the process.

If you want to discuss this or any other employment law issue within your business, please do not hesitate to contact Alexandra Dean on 01245 228141 or by email.

This is not legal advice; it is intended to provide information of general interest about current legal issues.