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COVID-19 has caused significant issues for businesses throughout Ireland.
A consequence is that redundancies have become a very real possibility for many employers. It may even be the case for your business. Before confirming redundancies, there are some alternative options to consider.
Reduce working hours
Staff may now be able to work fewer hours as businesses see a decrease in demand. However, it’s important that you don’t unilaterally change a fundamental term in a contract of employment.
When work resumes, be transparent with staff about the needs of the business. If possible, confirm their agreement to any changes to their employment contract before putting them into effect. Although staff may not be too enthusiastic at the prospect of reduced hours, it remains a better alternative to redundancy.
Pausing training
If you’re spending large amounts on training, another way to save on expenses is to pause training provisions.
Nowadays, staff value opportunities for development in their roles. So, if you decide to pause training provisions, make it clear to staff that it’s only until the business is in a healthier situation. You should also take care of staff engaged as part of a training contract. Removing the training element of their role could lead to a breach of contract claim.
Putting a hold on pay
Annual bonuses - a way of rewarding staff and keeping their morale high. The new normal? Businesses suspend bonus payments to ease financial pressure caused by COVID-19.
When it comes to bonuses, you need to remain cautious. If employees have a contractual entitlement to a bonus, withholding these payments could again be a breach of contract. That said, if a discretionary clause exists outlining that these payments are only made if business needs permit it, you could seek to rely on this discretion.
Furthermore, if you've paid bonuses consistently over previous years, and employees hit their targets, they could be entitled to receive their bonus based on custom and practice. This could, in turn, supersede your discretion not to award a bonus.
Flexible working arrangements
Some employers may see redundancy as a way of reducing the number of onsite staff and assisting in adhering to social distancing measures. However, flexible working offers an alternative to this. For example, staff could work from home on a more permanent basis. Or, shifts could be staggered to reduce numbers in the building at any one time.
Voluntary redundancy
If you wish to proceed with a redundancy procedure, you’ll need to ensure you follow the correct process. One key aspect of this is demonstrating that you've considered and offered staff alternatives to compulsory redundancies. One such alternative is that of voluntary redundancy.
This step invites staff to put themselves forward for redundancy. The knock-on effect is that employees who don’t want to be made redundant may avoid it. Ultimately though, it’s down to you who is to be made redundant.
