Government urged to stem job loss tide

, Following the CBI report last week warning that unemployment will rise to 3.02 million by next summer, business leaders have urged the Government to do more to help stem the tide of job losses, including a scheme aimed at providing an alternative to redundancy. Please let me know if you are interested in the below response from Rob McCreath, employment partner at city law firm, Archon Solicitors. Perhaps this can be worked into a feature article piece? I look forward to hearing from you soon: • It is good to see both employers and employees coming up with creative solutions to deal with the realities of the current job market - greater flexibility now will mean greater ability to recover and create new jobs in the longer term. • Suspending redundancies (as suggested by the CBI) could be done but it would probably only be workable on a voluntary basis for both employers and employees. Legislating to introduce such a scheme compulsorily would be fraught with difficulties and could set expensive legal hares running. • The TUC has valid concerns as to whether employees should be expected to accept a big cut income for a period of months and on the potential effect on redundancy payments. A voluntary scheme which protected the right to redundancy payments on the basis of the previous pay package would allay those concerns to some extent. • This may mean that those employees who have savings or the ability to borrow will have a better chance of staying in work (because they can afford to take a wage cut for a number of months) while those already at their financial limits may feel that they need to take redundancy. • The 90 day consultation period for redundancies only applies where 100 or more redundancies are proposed. Otherwise, the period is 30 days. The 90 day period causes difficulties for employers, as (under European case law) they have to continue to carry the costs of the full (and increasingly demoralised) workforce for that period before giving contractual notice. Contractual notice itself might be a further 3 months or longer in some cases. Where the business is close to failing, this can be enough to tip it over the edge. • For employees, the 90 day consultation period is often quite painful, as it is a period of great insecurity and disruption. However, it does give employees at risk of redundancy time to try to find alternative employment and to reduce their financial commitments where possible. • There is a case for reducing the 90 day period through legislation, perhaps in cases where the employer agrees to make an additional payment of compensation to employees who are made redundant. This would have the effect of channelling financial aid to those individuals who most need it - those being made redundant - while allowing the employer the ability to restructure its business more quickly and move on. Contacts: Rob McCreath, Partner, Archon Solicitors: 020 7 397 9650 r.mccreath@archonlaw.co.uk www.archonlaw.co.uk Lauren Alexander, Maltin PR: 020 7887 1357 lauren@maltinpr.com www.maltinpr.com Photograph: www.maltinpr.com/rob-mccreath