As restrictions for businesses continue to ease, many business owners may be considering how feasible it is to maintain the number of staff they employed prior to the Covid-19 crisis.
With restrictions still in place and losses to recoup – many businesses will find it difficult to take up where they left off before lockdown commenced.
As economic activity is likely to recover slowly, organisations will have to carefully assess their cost of business. The number of people employed is likely to form a large part of that decision-making process.
While redundancies are unfortunately likely to be made, there are alternatives to consider before confirming the decision to make an employee’s job redundant.
1. Salary reductions
In the current climate, employees are more likely to consider a reduced salary, allowing employers to avoid redundancy. The first way to save salary costs without making redundancies is to seek your employees’ agreement to a wage cut.
2. Layoff and short time working
Generally, employers need a contractual right to put employees on layoff or short time working. Layoffs occur when an employer suspends employment due to a shortage of work. Short-time working is a scenario where, due to unavailability of work, employers reduce work hours by more than half.
A contract will make it more straightforward to proceed with this. However, it may still be possible to put layoff or short-time working arrangements in place by agreement with employees. If employees do not agree to proposed layoffs or short-time working, they may face redundancy.
The crisis will lead to changes for many businesses in how they run their operations. Before considering redundancy, it would be worthwhile assessing how remote working or more flexible work patterns might allow more employees to stay on with the business.
4. Statutory leave
Employees have various statutory leave entitlements that could allow them to take a period of protected leave. For example, parents with children under the age of 12 are entitled to take up to 22 weeks of parental leave (this will increase to 26 weeks from 1st September 2020).
5. Annual Leave
While asking employees to take annual leave does not reduce salary expenses, it may allow you to extend leave during a short period where there is little work for employees. Asking employees to take a day a week for a number of weeks for instance might allow both the employer and employee to make it through a challenging trading period.