Redundancy is an unpleasant business, but unfortunately it can be necessary. It’s also often a simple solution to difficult financial problems. Cut the workforce, cut costs.But there are many different ways of carrying out redundancies. Whether it’s simply a matter of getting rid of one bad egg, or if you’re handling the livelihood of hundreds of people, redundancy can be done well or it can be done badly. That’s both from the perspective of the people being made redundant, and from the perspective of business owners. The impact needs to be softened and risks need to be mitigated.
Consult Your Staff
Businesses can be exposed to damage claims rising into the millions of pounds, if they fail to address appropriate levels of consultation at each stage.Staff need to be consulted when mass redundancies are unavoidable. If it’s considered that there hasn’t been an adequate level of consultation, it can be extremely costly for employers.Employment lawyers issued this warning when former SSI steelworkers at a plant in Redcar were awarded a share of £6.25 million due to inadequate consultation. Taking action through their trade union, around 1,100 workers won compensation, while others brought separate cases through other unions. It’s said that the judge made the award as there was “no consultation at all.”Businesses in similar positions have been encouraged to consult with unions and staff at the earliest possible stages. When it appears like the road ahead is going to be severely bumpy, foresight is needed and precautions should be taken.Andrew James, senior associate at Slater and Gordon, has said: “Instead of trying to trust staff and involving them in a way that might help the employer overcome the difficulties, decisions are made at the top level without any attempt to involve others. It is an unlawful approach, but also a short-sighted one.”
Keeping everyone informed
Transparency and democracy in communication is a must. Resentment can occur when information is protected or concealed, even amongst those whose jobs aren’t at risk. Equally though, with an issue such as redundancy, the reality should be faced that there is likely to be resentment.
Reducing the redundancy impact
Carrying out the above steps should help in reducing the impact on remaining employees. It should also serve to prepare the unfortunate workers, giving them time and a financial cushion to plan their next career move.[Read the Atlantic Resource blog: Big Decision Making Is Never Easy.]
Business always involves change
The business world is a fluid one that changes all the time. Organisations merge and are acquired, consumer habits change and technologies evolve, international markets fluctuate, traditional industries fade out and companies fail, while others thrive. Not much stays the same.It was announced this week that the energy firm Npower is to cut up to 2,500 jobs. This amounts to more than a fifth of its UK workforce. The BBC reported that it lost about 200,000 UK customers and received the most complaints of the six biggest energy suppliers in 2015.An organisation of this size, you would hope, will do redundancy well. However, one worker told the BBC “I’m still angry with Npower because they’ve been so secretive. They keep saying that we’re a family and that they will be open with us. Meanwhile they’re saying something else behind our backs.”Perhaps with something so emotive and personal as redundancy, it’s almost impossible to avoid resentment and emotional reactions. As a business owner you can only put all possible measures in place. Doing redundancy well means keeping communication channels open and consulting with ALL the necessary stakeholders well in advance of redundancy action.If you’re seeking new work or workers in construction, catering, office admin or care, please get in touch.
