Not an enviable choice to be faced with, but one that an increasing number of people seem to be having to make, or have foisted upon them, in industry. It is a practice that doesn’t seem to have caught on here in the City where swingeing headcount cuts still rule supreme when an employer wants to cut costs. I’ve written many times in this blog before about the redundancy process and selection criteria and the claims that can arise when employers get it wrong. However, what must an employer do if they decide that a pay reduction is preferable to a cull?
And whilst there may well be music and moonlight and love and romance somewhere, HR bods and employment lawyers probably won’t be looking forward to facing the music (or dancing for that matter) when it comes to dealing with the Employment Act 2008. It comes into force (or should that be farce?) on the 6th April and repeals the hugely criticised Employment Act 2002. In fact, there definitely will be trouble ahead.
It all depends on what is meant by “going bust” (sorry, typical lawyer’s answer). There are several ways a company can go bust, i.e become insolvent, and much will depend on whether the company can be rescued or if it is beyond help. Insolvency practitioners talk about “terminal” and “non-terminal” insolvencies. Insolvency law is a complex area and what follows is only a “noddy’s guide”.
This is a preview of
What happens if my employer goes bust? Part 2
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Read the full post (522 words, estimated 2:05 mins reading time)
I normally expect to get a lot of enquiries about low or non-payment of bonuses around this time of year. However, it is not normal for the subject of bankers’ bonuses to be front page news or for all three party leaders to jump on the bandwagon and criticise the level of bonus payments. Of course, we’re not living in normal times at the moment and bankers are going to be fair game for the media and politicians.
Just as I was sitting down wondering what to write about this week The Independent, with superb timing, published a headline entitled “Redundant Workers to get bigger pay offs” . The report says that the Government has ordered a review of the payments made to workers on redundancy, known as statutory redundancy pay (SRP). This is currently fixed at £350 per week for workers aged between 22 and 41 and is deemed to be a full week’s pay. Workers over 41 when made redundant receive 1.5 times that figure. That weekly figure is then multiplied by the number of complete years’ service (up to a maximum of 20) that the employee has with that company. The employer pays the SRP to the employee, plus whatever notice monies they are due, unless the company has become insolvent in which case the state pays.
For those of a morbid frame of mind, or merely of a train-spotter psyche, an interesting article on the Personnel Today website has just been published. Called Redundancy Tracker it lists all the announced major job losses since 12th September up to 30th January and it certainly makes for depressing reading.
According to the list there have been over 92,000 redundancies in that period – and that is only from high-profile and large employers. Low-lights include 27,000 at Woolworths, 10,000 at BT (where a job used to be for life) 2,444 at various local authorities (presumably the ones that also invested their Council Tax payers’ money in Iceland?) 1,000 on the London Underground and 2,200 at Virgin Media.
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