Redundancy remains on the agenda for 2014, says Sue Ziegler of Aeon Solicitors

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The International Monetary Fund has predicted that the UK economy will outshine its European counterparts with a 2.4% growth rate in 2014, and the Treasury has stated that the UK has now turned the corner and that the Government’s economic plan is working.

Talk of increased confidence is of little comfort, however, for the employees of organisations that have announced redundancy plans just weeks into the New Year. Fortunately a proportion of job losses will be achieved through voluntary rather than compulsory exit.

Barclaycard have stated that 150 jobs are at risk, mainly in the operations and technology departments at its Northampton headquarters. With 3000 staff at its Northampton site, the targeted reduction in skilled staff is aimed at transforming the way Barclaycard ‘delivers change’ for its UK businesses. In consultation with Unite, the staff representative body, Barclaycard hopes to keep redundancies to a minimum. Unite states that there is ‘no need’ for compulsory redundancies, pointing to Barclaycard having made over £1bn in profit in the first nine months of 2013.

At Kellogg’s main factory in Wrexham, a broadly equivalent number of employees are consulting about redundancy in an attempt to better align Kellogg’s assets ‘in the right locations’ to meet current and future demand. Out of the 520 workers, 140 are expected to go. Kellogg further states that it trusts that jobs will be reduced through early retirement and voluntary redundancy packages, and a 90-day consultation period is now underway at the plant to ensure a smooth transition.

The armed forces’ fourth and final round of redundancies (initially proposed in 2010 in the Strategic Defence and Security Review), has been set out in terms of its size and scope by the Defence Secretary Philip Hammond. An estimated 1505 personnel are facing redundancy comprising 80 medical staff and 1425 soldiers. Resettlement plans and tax-free payments have been set aside to ease the transition to civilian life, with an additional loan package available to enable personnel to purchase homes prior to exit. In previous rounds of redundancies the armed forces saw servicemen apply in significant numbers for voluntary redundancies.

Just last week the second of two planned 48-hour Tube strikes was averted. The RMT and TSSA unions had called the strikes to protest against job losses and plans to close manned ticket offices as part of the modernisation of the network.  With over 900 job cuts looming, the mayor of London had stated that the losses could be achieved through voluntary redundancy. Tube bosses and unions agreed to call off the industrial action, and the unions accepted the offer of an extended consultation period over the proposed redundancies.  One of the terms agreed is that across the period of discussion London Underground will put on hold all voluntary severance applications received and it will not request any new applications.

HR professionals at these organisations have been alert to the merits of investing time in devising and operating policies for voluntary redundancy. Primarily, these policies aim to minimise disruption and enhance the security of those under threat of losing their jobs. Employees who are willing to leave will, in effect, ‘self-select’ by applying for voluntary redundancy. Employees who prefer to remain in employment can re-dedicate themselves to their tasks without the anxiety of being targeted for compulsory redundancy if the staff-reduction target can be met through the voluntary redundancy and early retirement schemes.

Strategically, redundancy programmes can assist in addressing the structure of staff within the organisation. Employers may find it worthwhile to review their own business cases, and the benefits of operating a voluntary redundancy policy and early retirement scheme. Organisations need to ensure that policies are workable, affordable and reasonable having regard to the potentially increased costs involved.

While the positive UK growth predictions are most welcome not all business leaders are   convinced that the economy continues to be anything other than fragile at the present time, and it is apparent that redundancies (whether compulsory or voluntary) remain on the agenda for 2014.

Author Sue Ziegler is the founder of Aeon Solicitors, a firm in central London dealing with all areas of employment law including redundancy law, voluntary redundancy, dismissal process and settlement agreements.

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