What are the alternatives to redundancy?

With the furlough scheme coming to an end on 30th September, many businesses find themselves in a quandary as to what to do next with employees that have been on furlough. Some may have been on and off furlough for the last 18 months, and their role, and wider business, has likely changed significantly in that time.

As a result, many organisations are unfortunately having to look at making staff redundant. While it may not be the organisation’s first choice, and it may not be possible, depending on the circumstances, it is likely to be a more common outcome than returning to work full-time for many employees.

That said, there are a few alternatives that can be explored. In fact, exploring alternatives is an important part of the redundancy consultation process. With that in mind, let’s look at a few options available to your business as alternatives to redundancy.

Private furlough

There are a couple of terms for this being used for this topic – “private” or “non-government furlough” – referring to a non-statutory paid or unpaid lay-off. Obviously, any paid private furlough will need to be funded by the employer. An important step in this process is ensuring employees have the necessary lay-off clauses in their contracts. Generally, it is included in an employment contract that an employer cannot deny work or reduce pay. In that case, a new private furlough contract would need to be agreed upon, setting out things like working hours (if any), the length of the term of the agreement, terms involving payment, and any restrictions on working.

Throughout the COVID pandemic when assisting businesses within setting up and administering furlough programmes, we learned many employment contracts didn’t have the correct lay-off clause. This resulted in difficult conversations, more paperwork and added unnecessary expense and complexity to what was already a challenging situation.

An HR consultancy like Talk Staff can help you set out and negotiate new contracts that help you to facilitate private furlough.

Employee contracts/handbook updates

If you’ve not updated your employee paperwork for 5 years it’s probably out of date.

As part of this service, we’ll:

Review existing contracts and handbooks against current UK legislation
Make updates to include lay off clauses and other mechanisms that may be needed in the future
Assess changes needed inline with hybrid or remote working

From £750 £637.50

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Reduced hours

Another alternative to redundancy might be changing terms of employment, for example, a temporary or permanent reduction in working hours. This is a process that needs to be approached carefully, again highlighting the importance of proper consultation. Terms and conditions of some contracts have flexibility clauses that allow the employer to make contractual variations where necessary – however, these cannot be used to enforce changes to the employee’s disadvantage, so they are usually for minor changes only. The change can only be effective when agreed by both parties – again, emphasising the need for consultation with the employee before trying to enact anything.

Home and hybrid working

One of the alternatives to redundancy is obviously that the employee stays on with your business. That being said, as we set out earlier, their role, your business, their personal circumstances, and what they’re comfortable with may have changed significantly over the last 18 months or so. It’s therefore important to consider the needs and wishes of your employees, and how you will support them if they need to continue working from home indefinitely, or require a hybrid arrangement where they are in the office part-time.

Important considerations that come with this include:

Who will be offered hybrid or home working? Will it be everyone, or if not, how will people be selected?
How will hybrid or home worker employees’ hours work? Will there be a set number of hours per day, or strict office hours?
How do you ensure that home or hybrid workers have the same experience as other workers from a technology, cultural and engagement perspective?

What you need to do

Whichever avenue you are exploring as the right course of action for you and your employees, there are some important actions you should take to ensure that you have protected yourself and your employees. This includes:

Reviews and updates to contracts – ensuring the inclusion of things like lay-off and flexibility clauses which will give you the legal room you need to make changes to the terms of employment
Updating your employee handbook – this is important in setting out policies around annual or parental leave (which may be affected by hybrid/home working or reduced hours), behavioural expectations and disciplinary procedures