In the current economic climate, employers have to think very carefully about the immediate future of their business and how to adapt in order to survive this unpredictable and uncertain time.
An inevitable consideration for many employers will be finding ways to cut costs. Whilst it may be regrettable, one of the most effective ways of saving money is to reduce staff overheads.
There are a number of options that can be implemented to achieve this objective.
- Redundancy
- Restructuring
- Alternative solutions
Redundancy – (For groups of less than 20 people)
In some circumstances, redundancy is unavoidable. One of the most common reasons relied on by employees bringing a claim for unfair dismissal is redundancy. This is a fertile ground for litigation and redundancies must be handled with extreme care.
Key elements of dealing with redundancy:
- identify a redundancy situation;
- pool potential employees;
- fairly select employees using consistent criteria
- consult with employees;
- consider alternative employment;
- follow 3 step dismissal procedure
Restructuring
For businesses that have more than one area of work it may be suitable to re-direct the workforce into an area that is more ‘recession proof’. This measure is specific to the profile of your business. Maitland Walker’s employment team can provide initial, strategic advice on the most effective way to manage a re-structuring programme as well as offering practical advice on its implementation to ensure the business objectives can be achieved.
Alterative Solutions
There are a number of ways to reduce staff costs whilst avoiding the need for compulsory redundancies. These substitutes for redundancy have advantages, for example, redundancy payments are often avoided and the solutions are short-term. The later is an important characteristic for employers looking for a temporary solution whilst the adjustments that have been made to their business strategy take effect.
Suggested options are:
- Short term lay-off
- Reducing hours
- Flexible working
- Reducing salary
- Removal of benefits
- Re-training
These alternatives are useful in some circumstances; however, the implications of adopting one of these must be fully considered. For instance, if an employer wishes to alter an employee’s terms and conditions of employment, both parties must agree to the changes.
Who has eaten my lunch?
In a survey conducted by Norwich Union Life, statistics show that in the last 3 months, employees have stolen £4.1 million of office items and £1.8 million of food from shared fridges at work.
Nearly one in five (17%) of British employees admit to stealing stationery and toilet rolls from work and claiming additional expenses in order to save money in the credit crunch.
86% of those of who took part in the survey admitted they have been forced to turn ‘thrifty' in order to save money. Through these stealth moves some employees hope to save £150 this year.
Employers in the Hotel and leisure industry could have to compensate staff if customers behave inappropriately towards them.
Christmas Party Compensation
Venue operators now have a stricter responsibility to protect their staff from harassment. Harassment includes sexual or racist jokes. If staff members are subject to verbal or physical harassment during corporate events the employer can be liable. It is anticipated that the run-up to the busy Christmas season and focus on licensed premises to create new business will be the first real test of these laws.
Hotels that hire out their premises and ballrooms for corporate functions will also be under increased exposure to tribunal claims.
There are steps that can be taken, as an employer, to reduce the risk of such claims. One possibility is to ask corporate customers to indemnify against damages that might arise as a result of legal actions by their staff. In addition, adding reference to the venue’s equal opportunity policy in commercial contracts, warning discriminatory behaviour will not be tolerated on any grounds, is a prudent and protective move.