PRE REDUNDANCY PLANNING – An outline of measures is provided by Andrea McCann, Partner, McKees

What if you do not need or cannot afford all of your existing workforce, how can you save costs?

Options for the employer to consider include the following:

1. natural wastage
2. recruitment freezes
3. stopping or reducing overtime
4. offering early retirement to volunteers
5. voluntary redundancy
6. retraining or redeployment
7. sabbaticals and secondments
8. pay freezes

It is likely that the main options to be considered by employers will be:

1. agreeing reduced working hours with some or all staff (so for example you have an employee who had been working 35 hours a week pre lockdown but is now only needed for 20 hours) or…
2. keeping the 35 hour working week but at a % salary reduction.

These changes would have to be by mutual agreement and if you get agreement this should be evidenced by a modification to the employment contract. Annual leave would reduce pro rata with a reduction in hours.

If an employer cannot reach agreement the alternative could be compulsory redundancy.