Ashtons Legal’s 10 Top Tips to beat the Credit Crunch

Posted 12/11/2008

The credit crunch has had a huge impact on business confidence across the region. Companies are now reacting to the deteriorating market conditions and are looking at ways to tighten their belts so their business can survive these hard times. Human resources will be under the spotlight, so here is a list of some top tips to help make the best use of your staff during these testing times.

1. Be mindful when recruiting and ensure you appoint the right individual. Consider the current and future requirements of how the role will develop. Recruit employees with the skill-set needed both now and in the future.

2. Review your current contracts of employment and ensure they match your needs. In particular, look to see if there are opportunities to incentivise employees to perform and consider variation of benefits which might make a saving. However, do remember that, to avoid constructive dismissal claims, you must follow a process of consultation before varying fundamental terms for existing employees.

3. Restructure and reorganise the workforce to get the best out of them but do so with adequate workforce consultation.

4. Consider temporary contracts for a period of up to 6-9 months, including the use of agency workers to see you through periods of peaks and troughs.

5. Ensure the contract creates the expectation of probation periods and regular reviews- and stick to them.

6. Be mindful of temporary contracts that continue beyond 51 weeks. Remember that re-employment of the same individual on a series of contracts, can be seen as continuous employment.

7. If working in a manufacturing or service industry, ensure your employment contract has provision for short-time working to enable you to offer the employee’s shorter hours of work if there is insufficient work to enable them to work their full contractual hours.

8. Consider the use of ‘lay-off’ in the contract. You may need to lay off workers whose skills are not required from time to time. Utilise a system for doing this by means of a rota if necessary. However, be aware, prolonged lay-off could result in a redundancy situation.

9. As a last resort, if you are considering making redundancies. It is absolutely crucial that you ensure that a proper redundancy process is followed and one of the key features of a fair redundancy process is that adequate warning of the possibility of redundancy should be given.

10. If you need to make more than 20 redundancies in a 90 day period, or more than 100 in a 90 day period remember that there is a special process to be followed and proscribed collective consultation periods, in addition to the usual redundancy process.

Finally, the universally disliked statutory dispute resolution procedures will remain in force until April 2009. Therefore, they will continue to apply to dismissals on the grounds of redundancy.