When uncertainty is the only certainty

Flexibility is key to survival and success, so it's vital employers plan for a variety of scenarios.

Over the past two or three years, uncertainty has been perhaps the most common theme for the wider British economy, as well as the businesses that operate in it.

For businesses, this ongoing uncertainty means it's been particularly difficult to plan for the future. Mandi Silverwood, employment law and human resources consultant at Mentor, says: “Some businesses are likely to be feeling very vulnerable right now, wondering what's to come.”

Flexibility is key

As such, Silverwood says it's a “top priority” for businesses to be flexible in how they manage their operations - with staffing one of the most complex and challenging issues.

“Some owners may worry that they could find themselves having to cut costs and be faced with too many staff, while others may be considering how and where they can source staff quickly and efficiently as business demands increase,” she explains.

One of the most serious forms of disruption that companies can face is a sudden downturn in business. The loss of a major contract, for example, may mean an employer needs to reduce headcount as quickly as possible. But employment law may constrain their ability to do so.

“If you have a lot of employees who have been with the business for less than two years, it's possible to make decisions quickly,” says Silverwood. “They have fewer statutory rights - unless their dismissal relates to protected characteristics such as age, race or maternity.”

But businesses may have to enter into a full-scale redundancy process in order to trim down their workforce.

“If you have fewer than 20 employees, you need to follow what is called a 'reasonable' consultation process, which includes consultation with the staff involved,” she adds. “If there are more staff involved, you'll have to implement a longer consultation period. Furthermore, workers who have been there a long time could be entitled to a high level of redundancy pay - so this could end up being a very costly process.”

Getting it right

Any mistakes that a business makes in conducting a redundancy programme - for example, discriminating against workers on the grounds of their age, even inadvertently - could result in it being taken to an employment tribunal.

And, in uncertain times, employers may rue the day they make key staff redundant, particularly where they have specialist skills or deep knowledge of the business. There are alternatives. “It may be possible to implement a period of short-time working or layoff to cope with a sudden drop in activity,” Silverwood says. 

“If you don't have a contractual clause that allows you to impose layoffs, you can look to reduce hours voluntarily. But take care - employees who have a mortgage to pay or a family to feed are unlikely to agree to this course of action."

Another possible approach to an uncertain business climate, Silverwood says, is natural wastage - where certain permanent staff who leave are not replaced. This allows owners to retain a core of skilled staff and use temporary workers or contractors, for example, to cope with any spikes in demand. “But it can take time to get to this point,” she adds.

Silverwood says business owners could also look at alternative strategies to deal with uncertainty. 

“A client has recently sold part of their business to a larger organisation, which has allowed them the opportunity to focus on growing their other existing business,” she explains. 

But any sale or transfer of a business also has employment law implications. “They ensured they followed formal procedures and consulted effectively with the staff involved - and this resulted in a seamless process for the employees and also the new owner.”

by Chris Torney

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