Skip to main content

Cookies

We use cookies to help provide a better website experience for you, as well as to understand how people use our website and to provide relevant advertising.

By clicking "I agree", you'll be letting us use cookies to improve your website experience. To find out more or to change your cookie preferences, click "Manage Cookies".

We value your privacy

Like many other websites, our website uses cookies. Cookies are small files placed on your computer when you visit our site. They serve a number of purposes, including ensuring that certain parts of the website work properly, allowing us to understand which areas of our website are the most popular and allowing us to provide more relevant advertising messages. They don't allow us to identify you specifically and no personal data is gathered about you.

If you'd prefer that cookies weren't placed on your computer when you visit our site, you can use the controls below to allow or disallow different types of cookie. Some cookies are essential for the website to work, so they can't be disallowed.

  • These cookies give us anonymised information on how people use our website. We use these cookies to help us tailor our site to meet the needs of our visitors, for example by making sure our most popular pages are easy to find.

  • These cookies serve a number of purposes, such as allowing you to share our content with your friends and social networks. We also use these cookies to provide targeted advertising, so you may see relevant adverts based on the pages you look at on our website.

  • About
  • News & Insights
  • Careers
  • COVID-19
  • Brexit
0370 1500 100
Irwin Mitchell Logo
  • Personal
    • Personal
    • Personal Home
    • Personal Injury Claims
      • Personal Injury Claims
      • Personal Injury Claims Home
      • Abuse & Criminal Injury Claims
      • Accidents In Public Places Claims
      • Accident At Work Claims
      • Air, Rail & Sea Related Claims
      • Asbestos & Mesothelioma Claims
      • Changing Solicitors During a Personal Injury Claim
      • Group Claims
      • Holiday Accidents & Illness Claims
      • Illness Compensation Claims
      • Industrial Disease Claims
      • Injury Types
      • Military Injury Compensation Claims
      • No Win No Fee Personal Injury Claims
      • Personal Injury Claims In Scotland
      • Personal Injury Information
      • How To Claim Compensation For Personal Injury
      • Product Liability Claims
      • Rehabilitation & Medical Care
      • Road Traffic Accident Claims
      • Serious Injury Claims
      • Support Services
    • Medical Negligence Claims
      • Medical Negligence Claims
      • Medical Negligence Claims Home
      • Cancer Misdiagnosis Claims
      • Birth Injury Claims
      • Cauda Equina Syndrome Claims
      • Cosmetic Surgery Claims
      • Cerebral Palsy Claims
      • Defective Medical Device Claims
      • Dental Negligence Claims
      • Diabetes Claims
      • Fatal Medical Negligence Claims & Inquests
      • GP Negligence Claims
      • Hospital Negligence Claims
      • What Is Medical Negligence?
      • Meningitis Misdiagnosis Claims
      • Failure To Prevent Suicide Claims
      • Misdiagnosis Claims
      • No Win No Fee Medical Negligence Claims
      • Ophthalmic Negligence Claims
      • Pregnancy & Gynaecology Injury Claims
      • Sepsis Negligence Claims
      • Shrewsbury & Telford Hospital NHS Trust Maternity Care Claims
      • Stroke Misdiagnosis Claims
      • Surgery Compensation Claims
    • Family Law
      • Family Law
      • Family Law Home
      • Divorce Solicitors
      • Prenuptial & Postnuptial Agreement Solicitors
      • Child Abduction Solicitors
      • Civil Partnership Solicitors
      • LGBT+ Family Law Solicitors
      • Unmarried Couples' Rights
      • Divorce Financial Settlement Solicitors
      • Child Arrangement Orders
      • Out Of Court Divorce Solicitors
      • Separation Agreement Solicitors
      • Adoption & Surrogacy Solicitors
      • Domestic Violence Solicitors
    • Wills, Trusts & Estates
      • Wills, Trusts & Estates
      • Wills, Trusts & Estates Home
      • Estate Planning Solicitors
      • Powers Of Attorney
      • Trusts
      • Will Writing Services
      • Will Disputes & Contentious Probate
    • Conveyancing & Property Solicitors
      • Conveyancing & Property Solicitors
      • Conveyancing & Property Solicitors Home
      • Conveyancing Fees Calculator
      • Buying A Property
      • Selling A Property
      • Remortgage
      • Transfer Of Equity
      • Buy To Let
      • Absentee Landlord & Freeholder Tracing Service
      • Conveyancing & Property In Scotland
      • Freehold Purchase (Leasehold Enfranchisement) Solicitors
      • Lease Extension Solicitors
      • Conveyancing Guide
    • Tax
      • Tax
      • Tax Home
      • Business Tax
      • Inheritance Tax
      • International Tax
      • Professional Negligence
      • HMRC Tax Investigations
      • Tax Disputes & Litigation
      • Tax Residence
      • Tax Returns & Compliance
      • Wealth Structuring
    • Probate
      • Probate
      • Probate Home
      • International Probate
      • Probate Sale Conveyancing
      • What Is Probate & How Does It Work?
    • Will, Trust & Estate Disputes
      • Will, Trust & Estate Disputes
      • Will, Trust & Estate Disputes Home
      • Trust Disputes
      • Inheritance Act Claims
      • Contesting A Will
      • Contentious Probate
      • Pre-Death Agreements
      • Professional Negligence
      • Challenging A Lifetime Gift
      • Financial Abuse
      • Statutory Will Disputes
      • Defending A Contested Will
    • Employment Law Solicitors
      • Employment Law Solicitors
      • Employment Law Solicitors Home
      • Employment Contract Solicitors
      • Employment Disputes
      • Dismissal & Redundancy Solicitors
      • Employment Discrimination Solicitors
      • Harassment & Bullying At Work Solicitors
      • Parental & Family Friendly Employment Rights
      • Professional Discipline Solicitors
      • Recruitment & Promotion
      • Senior Executives & Professionals
      • Settlement Agreements
      • Whistleblowing Solicitors
    • Elderly Legal Services
    • Protecting Your Rights
      • Protecting Your Rights
      • Protecting Your Rights Home
      • Actions Against The Police
      • Environmental & Planning Law
      • Data Protection Breach Claims
      • Education Law
      • Healthcare & Social Services
      • Human Rights
      • Judicial Review
      • Mental Capacity
      • Motoring Offences Legal Advice
      • Professional Regulation & Discipline
      • Dispute Resolution
      • Legal Aid
    • Immigration Solicitors
      • Immigration Solicitors
      • Immigration Solicitors Home
      • British Citizenship & Naturalisation Solicitors
      • EU & EEA Immigration Solicitors
      • Indefinite Leave To Remain Solicitors
      • Spouse Visa Solicitors
      • Innovator Visa
      • Tier 1 Entrepreneur Visa
      • Permanent Residence Solicitors
      • Tier 1 Investor Visa
      • Business Immigration Solicitors
      • Our Prices - Immigration
    • Crime & Investigations
      • Crime & Investigations
      • Crime & Investigations Home
      • Crime
      • Fraud & Financial Crime
      • Motoring Offences Legal Advice
      • Regulatory Investigations & Enforcement
    • Insolvency
      • Insolvency
      • Insolvency Home
      • Business Restructuring & Insolvency
      • Debt Consultancy
      • Insolvency Disputes & Litigation
    • Court Of Protection
      • Court Of Protection
      • Court Of Protection Home
      • Court Of Protection Deputyship
      • Healthcare and Social Services
      • Frequently Asked Questions
      • Personal Injury Trusts
      • Powers Of Attorney
      • Powers Of Attorney Disputes
      • Statutory Wills And Trusts
  • Wealth Management
    • Wealth Management
    • Wealth Management Home
    • Asset Management For Personal Injury
    • Charity & Philanthropy
    • Estate Planning
    • Financial Planning
    • Intergenerational Wealth Management
    • Investment Management
    • Retirement Financial Planning
    • Succession Planning
    • Tax Planning
  • Business
    • Business
    • Business Home
    • Sectors
      • Sectors
      • Sectors Home
      • Consumer & Retail
      • Education
      • Financial & Professional Services
      • Manufacturing
      • Media & Entertainment
      • Real Estate
      • Sport
      • Technology & Communications
    • Banking & Finance
      • Banking & Finance
      • Banking & Finance Home
      • Corporate Banking
      • Funds
      • Leveraged & Acquisition Finance
      • Real Estate Finance
      • Receivables Finance & Asset Based Lending
    • Business Crime
      • Business Crime
      • Business Crime Home
      • Anti-Bribery & Corruption
      • Insider Trading & Market Abuse
      • Corporate Internal Investigations
    • Business Immigration
      • Business Immigration
      • Business Immigration Home
      • Business Visitor Visa
      • Innovator Visa
      • Prevention Of Illegal Working
      • Sole Representative Of An Overseas Business
      • Tier 1 Entrepreneur Visa
      • Tier 1 Investor Visa
      • Tier 2 & 5 Sponsor Licence
      • Tier 2 Visa
      • Tier 4 Sponsor Licence
    • Commercial
      • Commercial
      • Commercial Home
      • Commercial Contracts
      • Charities
      • Competition Law
      • GDPR & Data Protection
      • Information Technology
      • Media & Entertainment
      • Sourcing
      • Licensing
    • Commercial Litigation & Dispute Resolution
      • Commercial Litigation & Dispute Resolution
      • Commercial Litigation & Dispute Resolution Home
      • Banking & Finance Litigation
      • Business Interruption Insurance Lawyers
      • Contract Disputes
      • Commercial Judicial Review
      • Defamation & Reputation Management
      • International & Cross-Border Disputes
      • Litigation Funding
      • Professional Negligence
    • Corporate
      • Corporate
      • Corporate Home
      • Corporate Advisory
      • Equity Capital Markets
      • Mergers & Acquisitions (M&A)
      • Private Equity
    • Costs Team
    • Employment Law
      • Employment Law
      • Employment Law Home
      • Business Immigration
      • Employment Contracts, Policies & Procedures
      • Disciplinary & Grievance
      • Employee & Industrial Relations
      • Employment Litigation & Dispute Resolution
      • Equality, Diversity & Discrimination
      • Flexible Working Arrangements
      • Health & Safety
      • HR Advice Service - IMhrplus
      • Managing Sickness Absence
      • Pensions
      • Recruitment
      • Restrictive Covenants
      • Restructuring & Redundancy
      • Self Employment, Contractors & Agency Workers
      • Employment Seminars, Training & Updates
      • Terminating Employment & Settlement Agreements
      • TUPE
    • In-House Counsel
    • Intellectual Property
      • Intellectual Property
      • Intellectual Property Home
      • Defamation & Reputation Management
      • Copyright Lawyers
      • Design Rights Lawyers
      • Image Rights Lawyers
      • Patent Lawyers
      • Trade Mark Lawyers
      • Trade Secrets Lawyers
    • Legal Helpline
    • Pensions
      • Pensions
      • Pensions Home
      • Employment
      • Managing Death Benefit Trusts
    • Regulatory & Compliance
      • Regulatory & Compliance
      • Regulatory & Compliance Home
      • Road Transport & Operator Compliance
      • GDPR & Data Protection
      • Environment & Safety Regulatory Compliance
      • Financial Services Regulation
    • Real Estate
      • Real Estate
      • Real Estate Home
      • Corporate Occupiers
      • Real Estate Development and Regeneration
      • Construction & Engineering
      • Real Estate Finance
      • Real Estate Investment
      • Real Estate Tax
      • Residential Development
      • Retirement Living & Care
      • Strategic Land
      • Structured Real Estate
      • Planning & Infrastructure
      • Property Litigation & Real Estate Disputes
    • Restructuring & Insolvency
      • Restructuring & Insolvency
      • Restructuring & Insolvency Home
      • Corporate Insolvency
      • Partnership Insolvency
      • Directors' Duties
      • Phoenix Companies
      • Restructuring
    • Tax
      • Tax
      • Tax Home
      • Corporate Tax
      • Real Estate Tax
      • Tax Investigations
  • People
    • People
    • People Home
    • Search By Name
    • Search By Location
    • Search By Expertise
    • Business Management
  • Offices
    • Offices
    • Offices Home
    • Birmingham
    • Bristol
    • Cambridge
    • Chichester
    • Gatwick
    • Glasgow
    • Leeds
    • London
    • Manchester
    • Middlesbrough
    • Newbury
    • Newcastle
    • Reading
    • Sheffield
    • Southampton
  • Contact
  • About
  • News & Insights
  • Careers
  • COVID-19
  • Brexit
Irwin Mitchell Logo

Call us on

0370 1500 100 Or request a call back
  • Home
  • News & Insights
  • News
  • To Cut Or Not To Cut?

To Cut Or Not To Cut?

29.02.2012

Recession-Based Employee Techniques

Whilst the UK economy might not be in recession, technically – two consecutive quarters of negative growth – it certainly has not recovered from the recession of the last two years as well and as quickly as was hoped and is still teetering on the edge.

In any event, the day to day impact on many businesses, in many sectors, of macro-economic trends is usually not felt for some time, say a year or more, hence unemployment creeping up towards 3m when the economy should be on the way back. The recovery curve is too steep to avoid the impact of the continuing decline, particularly on those some way down the supply chain.

The Coalition Government has a raft of proposed changes to employment law, at different stages of development, many aimed at encouraging employment. However, business in the UK has still to contend with low growth, the damaging impact of the weak Euro zone, low investment and an unrealistic expectation that the private sector will fill the employment gap increased by large scale cost cutting in the public sector. Reforms will not arrive quickly enough to save another round of difficult decisions.

During the first year of recession, many UK businesses, in a wide range of sectors, had to try to rebalance income -v – cost with an eye to retaining their workforce, so as to emerge from recession still competitive. A number of “recession-based” tactics were employed as a means of reducing employment costs without reducing staff numbers. This included a more than usually co-operative relationship with employee representatives, including unions, but not in all sectors and not in all circumstances. The sometimes uneasy truce was tested usually when reducing costs involved changing terms of employment, particularly to update or just remove what were perceived by many employers as out dated collective bargaining arrangements (which was really the argument behind the Unite/BA saga).

Coupled with a reducing range of options for cost savings, many employers are now facing the inevitability of redundancies, taking the view that they have done all they can to avoid them and staff reductions are now the only viable option.

Or are they?

This might be a good time to review the options of “recession-based” employee relations tactics, whilst looking at how some options have changed since the recession began, as well as casting an eye over the key elements of a redundancy exercise, should one really need to happen.

There is no “one size fits all” approach to this situation. There are several flexible working arrangements which could be deployed, in principle, but whether any or all of them might work for each business depends on such things as:

• The size and structure of the business;
• The resources available to devote to the exercise;
• What is in the contracts of employment – which could have an impact on the employer’s ability to make changes;
• Relationships with the employees or their representatives, particularly in a unionised environment and particularly in sectors where unions take a sectoral or national approach to industrial relations;
• The likely timescale of financial need and the steps being considered;
• Statutory, contractual and collective rights affected by the proposed changes;
• The necessity to act.

From small to large scale actions, possibilities could include:

• Wage restraint – a freeze, cuts, no bonuses (where relevant), either with or without employee consent;
• Reduction in overtime;
• Lay off temps or consultants;
• Reduction of hours or the working week;
• Offer early retirement;
• Offer a “menu” of possible actions – including time off without pay, reduction in pay, temporary change to other benefits – with a ceiling on the impact of, say, 20% of pay and a review; leaving it to employees which elements they choose;
• Corporate restructures; either sell a loss-making part or, more subtly, outsource such a part on a fixed term to providers who are experienced in providing those services, in an attempt to preserve the business and employment, whilst even making a return.

Since the beginning of the recession, there have been some changes in the law which might influence choices.

The Agency Workers Regulations would not prevent laying off temps, first but for those who qualify for pay protection, after 12 weeks in the same assignment, there may be some restraint on changing their terms.

The Default Retirement Age has now been abolished. Subject to the decision of the Supreme Court case heard on 17-19 January 2012, an individual employer might be able to justify having its own retirement age but, in the absence of that, a discussion about retirement could lead to an age discrimination claim.

Meanwhile, the now seminal case of Bateman – v –Asda, in the Employment Appeal Tribunal, has opened a door for employers to change terms of employment, particularly by having an effective variation clause in employment contracts. This is important because many of the recession-based tactics might involve changing employment terms. [Our Employment Team was involved on the successful side in that case].

If all else fails, always remember that redundancy is a dismissal. We talk about “making someone redundant”. Redundancy is a matter of fact – someone either is or is not redundant. The dismissal should then be carried out fairly and reasonably in all the circumstances. The whole law on redundancy is beyond the scope of this article but the box includes the key elements necessary for a fair collective redundancy procedure.

 

Contact us today

To talk about your situation

Prefer not to call?

Use our form

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.

Press Contact

Dave Grimshaw
Dave Grimshaw Head of External Communications and PR - Senior Associate 0114 274 4397

0114 274 4397

Email Dave

Tags

Employment

Related articles

  • 11.02.2021 - Amsterdam Overtakes London As Leading Share Trading Hub
  • 08.02.2021 - Hospitality And COVID-19 - Utilising Outdoor Space
  • 02.02.2021 - Brexit Fails To Deliver Northern Ireland Packages
  • 01.02.2021 - Video Game Companies Set To Receive Free Legal Guidance On Brexit
  • 29.01.2021 - Lawyers Say Employees Have No 'Right' To Furlough When Faced With Redundancy
  • 29.01.2021 - Gender Reassignment: Transgender Employment Rights -Where Are We Now?
  • Contact
  • 0370 1500 100
  • Contact Irwin Mitchell
  • Social Media
  • Twitter
  • Facebook
  • YouTube
  • LinkedIn
  • Instagram
  • About Irwin Mitchell
  • About Us
  • Social Responsibility
  • Careers
  • Business Management
  • SRA Regulated
  • Terms & Conditions
  • Accessibility
  • Privacy & Security
  • Hoaxes
  • Modern Slavery Act Statement
  • Manage Cookie Settings

© 2021  Irwin Mitchell LLP

Irwin Mitchell LLP is authorised & regulated by the Solicitors Regulation Authority. Our Regulatory Information

Request A Callback

Enter you details below and we'll call you back, at a time of your choice

Preferred date*
Today
Tomorrow

This data will only be used by Irwin Mitchell for processing your query and for no other purpose.