Making Salary Cutbacks

[tatler]

Have done everything to avoid making redundancies but at this stage have to ask staff to take a salary cut of up to 10%. Will also have to layoff 10% of staff.Anyone have any experience in this.

1. What if some employees refuse to accept cuts? Can I force the acceptance?
2. Do I have to offer voluntary redundancy or can I identify people for redundancy? The criteria would be on economical grounds. For example employee A has same skills as B + C so B & C would be the candidates.

 

[Mpsox]

In terms of redundancies, it may be best to go with voluntary first to see if you will get some who will take it and advise staff that if you don't get the numbers you need you will then move to compulsary. The plus side of that is that if you get the numbers voluntarily, you avoid all the issues of a compulsary redundancy situation. The downside is that you may have to pay more then statutory to make it attractive, whatever you offer under the terms of the voluntary scheme needs to be offered to staff being made compulsory redundant and the people who may volunteer to go are not always the ones you want to leave

If you move to compulsory redundancies, yes you can identify people but the reasons you use for picking those people have to be fair and seen to be fair. Certain reasons (eg someone on maternity leave) may be illegal.

 

[dinjoecurry]

could you put some or all of the employees on a 3 day week thereby reducing the labour cost by up to 40% and not have to make any redundencies the employees might prefer to share the available work rather than some friends being made redundant.Talk it out frankly with your employees and you may be surprised in their reaction

 

[8till8]

1. What if some employees refuse to accept cuts? Can I force the acceptance?

You cannot force the acceptance because it is a change in their terms and conditions of employment, so they have to agree to it (be persuasive!)

 

[Mpsox]

You cannot force the acceptance because it is a change in their terms and conditions of employment, so they have to agree to it (be persuasive!)

Agreed, however you need also need to make them aware that the consequencies of not signing may mean savings need to be got elsewhere, ie, more heads role

you could suggest making it temporary and that you'd be happy to review it with a view to reverting to old salary levels if things improve

 

[D8Lady]

I don't envy you in your task tatler, its an unenviable situation to be in.

Can you engage with your staff on other areas of cost cutting - perhaps they have some ideas that you may not have considered?

For example, some people may be happy to take a reduction in pay with a reduction in hours. Might suit parents, people who are studying or who want to do some sort of voluntary activity.

But the bottom line will be - who can you not let go? What jobs are absolutley vital to your business so that it can survive and hopefully be ready for a upturn, whenever that happens.

Good luck.

 

[tatler]

Thanks for all the advice guys.
Not easy but some people are fantastic and would do anything to save a collegues job.

 

[patftrears]

Thanks for all the advice guys.
Not easy but some people are fantastic and would do anything to save a collegues job.

Depending how many staff you have three is procedures you have to follow for introducing redundancies, consulting with staff etc.. I think its only if you have > 50 staff.