Alternatives to redundancy

When retaining vital skills is important, employers may be keen to find alternatives to redundancy.

Common approaches include:

• recruitment freeze 

• stopping overtime

• offering early retirement 

• retraining or redeployment 

• pay freezes or cuts

• pay deferral schemes – a temporary cut in wages/salary which will be given back at a later date

• cutting bonuses and/or other benefits

• a temporary change from full-time to part-time working

• unpaid working or unpaid leave – 7,000 British Airways staff agreed to this, most opting for unpaid leave

• sabbaticals – car makers Jaguar Land Rover and Vauxhall both offered sabbaticals in return for reduced pay, the money workers were paid while on sabbatical will be deducted from future overtime

• secondments to other companies

• closing graduate training schemes

• reducing the use of agency workers/freelancers.

Temporary lay-offs

Guarantee payments are another possible alternative to redundancy. Payment must only be made for an entire day lost. Five days’ payment, of £26 a day (at the time of writing, July 2015), is allowed during any three-month period. These can be paid to employees when they are temporarily ‘laid off’ due to insufficient work, as a possible alternative to redundancy. Guarantee payments can only apply if the employment contract enables employers to lay-off employees due to lack of demand.