redundancies

Extended Recession may Force Redundancies

Extended Recession may Force Redundancies

Small firms that have avoided making redundancies in the hope that the recession would not be too long, may now be forced to make cutbacks, the Institute of Directors (IoD) has warned, writes Kate Horstead. Figures from the Office for National Statistics (ONS) have revealed that the UK economy was still in decline in the third quarter of 2009, with GDP falling by 0.4%. The research found that there were declines in output in all sections of the economy. Economic analysts have warned that the results were worse than expected and point to a slow recovery. “The figures are disappointing for businesses, which may have to make more redundancies due to the difficulties in obtaining bank credit,” said IoD senior economist, Peter Patterson. “Many businesses have avoided laying of... »

Small Manufacturers make Record Redundancies

Small Manufacturers make Record Redundancies

Small manufacturing firms are being forced to lay off staff at the fastest rate since the early nineties, according to the Confederation of British Industry (CBI). Research from the CBI revealed that 38% of small manufacturers cut staff in the last quarter of 2008, while just 7% recruited. The resulting balance of -31% represents the steepest fall in employment in the sector since January 1992. "The jobs picture among smaller manufacturers has deteriorated markedly since last July in the face of rapidly declining demand for UK-made goods at home and abroad," said CBI SME Council chairman Russell Griggs. "Firms are steeling themselves for a very difficult few months with output and orders expected to fall at a record pace in the next quarter," he added. "As a result... »

Employers Planning Redundancies face Increased Costs

Employers Planning Redundancies face Increased Costs

Small firms intending to lay off staff face increased costs, following a rise in statutory redundancy payments. Since the 1st February, the amount employers must pay staff who qualify for the maximum redundancy payment increased from £330 per week to £350 per week. Redundancy payments are calculated according to the employee’s age and number of years’ continuous employment with the business. Employees are required to have two years’ continuous service to be entitled to a redundancy payment. According to law firm Mace and Jones partner, Mark Hatfield, many employers will have rushed to make their redundancies before 1 February in order to make cost savings. "Many employers had made plans to make redundancies and knew they had to do it between Christmas and... »

Redundancy

Employers take steps to avoid Redundancies

Businesses are avoiding redundancies by putting a hold on recruitment and cutting back on agency workers, according to the Chartered Institute of Personnel and Development (CIPD). A survey of nearly 900 businesses, carried out by the CIPD and accountancy firm KPMG, revealed that 50% have brought in a recruitment freeze, while 44% have terminated temporary or agency workers contracts to prevent making cutbacks to in–house staff. CIPD public policy adviser, Gerwyn Davies said: “Measures such as recruitment freezes, shedding temporary workers and introducing short–term working are clearly not without pain, but they can often be preferable to redundancies” “There can be a high cost to making staff redundant, as letting skilled staff go can risk low morale among th... »

Redundancy

Redundancy a Costly Solution to Recession woes

Redundancy is not necessarily the best money–saving solution for recession–hit firms — costing businesses up to £16,375 per employee laid off, the Chartered Institute of Personnel and Development(CIPD) has claimed. The direct cost of redundancies for employers is typically between £10,575 and £16,375 per employee laid off — this includes redundancy payments, the need to create new job positions and recruiting for these roles. This calculation comes amid predictions that many businesses will be forced to make redundancies this year in an attempt to cut costs and survive the recession. CIPD chief economist John Philpott said: “While making people redundant can seem one of the most straightforward ways of cutting costs, redundancy is itself a si... »

PDF - Redundancy Handling

Firms risk Tribunals from Credit Crunch Redundancies

Employers are risking employment tribunal claims by not following statutory redundancy procedures when laying–off staff as part of their credit crunch cutbacks, employment law firm Croner Consulting has warned. According to the UK Tribunal Service, there has been a 42% rise in employment tribunal claims during the last 12 months. Croner’s employment technical consultant, Gillian Dowling, said: “These figures are a direct result of the impact of the credit crunch. In a bid to survive the current economic pinch, many firms are looking at ways to preserve the future of their business, and see staff redundancies as the only way to do this. “We’ve seen redundancies happening across the board, at businesses of all sizes,” she added. “When employers start... »