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A flexible way of avoiding redundancy

Temporary flexible working can cut costs in your dealership without the need for redundancy, said David Readman, HR expert and director of Employment Practice and Law.

It also means retaining good staff, keeping essential skills and keeping up employee morale.
In its simplest form, all staff would take a cut in pay and hours for a period of time until business performance began to improve.

Logistics can be more complicated when certain departments are busier than others, creating an unequal starting point, admitted Readman.

Ideally, a flexible working arrangement would be open-ended rather than set at three or six months to allow for any eventualities in the company.

“If the management is open and does it right, employees understand that such an agreement avoids compulsory redundancy and everyone will return to full-time work at some point. It can be fantastic for morale.”

Alexander Binzel, a welding company for the automotive industry, introduced short-time flexible working, cutting pay and hours for all its 30 staff by 10%.

Readman said management did not want to lose any staff, acknowledging that it would need them back once business picked up.

It addressed the staff, who all agreed to the cut, understanding its benefits for all parties.
Employees often consider companies that introduce short-term flexible working to stave off a worse outcome are good to work for, added Readman.

Employers should always ensure employment contracts contain lay-off and short-term contract clauses.

Without these clauses, it can be more difficult to rely on staff agreeing to this option when the going gets tough.



Top tips for handling redundancy

Consult (meaningfully)

This is the process you should go through before you announce any decisions. At this stage you should be discussing proposals.

Is redundancy the real reason?

If an employment tribunal feels that you used redundancy as a pretext to dispense with someone whose job had not gone, you will lose an unfair dismissal claim.

Selection criteria – choose carefully

Try to stick to objective factors in deciding who to select. Achievement of targets and attendance records are likely to be valid.

Create a paper trail – be able to show that you did all the right things

Take a record at consultation meetings and explain in writing why alternative proposals are or are not acceptable.

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