4 alternatives to redundancy
By Charles Power
If you are considering making some roles in your organisation redundant in order to cut costs, it is a good idea to first consider the alternatives.
A while back in the Bulletin, we discussed 4 possible alternatives to redundancy, so to refresh your memory, I’ll go over them again today:
1. Reducing annual leave accruals
By not allowing your employees to accrue an excessive amount of annual leave and reducing your current leave liability, you can reduce your costs significantly. I’ll go over just how you can go about this in Thursday’s Bulletin.
You could consider negotiating a different employment arrangement with an employee instead of making their role redundant. For example, you could offer to convert the employee from full-time to part-time. You could also apply a temporary pay cut or even move the employee to a different role elsewhere in your organisation.
Of course, in all of the above cases, you will require the employee’s agreement and remember – that agreement must not be obtained by a threat of dismissal or some other harm to their employment. If you do obtain an employee’s agreement, make sure it is documented and make it clear that their other existing employment conditions will continue to apply.
3. A freeze on hiring or recruiting new employees
By putting a freeze on both hiring new employees and replacing those employees that leave, you can cut your costs.
4. Expanding the circumstances in which employees can take unpaid leave
You might introduce policies that enable people to take extended unpaid leave, for example career break leave, study leave or extended parental leave.
So before you resort to making redundancies, consider these options first.
For more information on redundancies, check out the Redundancy and Retrenchment chapter in your copy of the Employment Law Practical Handbook.
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