Redundancy or Pay Cuts?

Are Redundancies on the Rise?

But what selection procedure did they use?

The signs for Christmas are everywhere – cards in the shops, pubs seeking bookings for the office party and on television: Strictly Come Dancing and The Apprentice are a sure sign that we’re on the downward run to the annual festival of eating, drinking and making merry.

However, there’s another more unpleasant sign: redundancies may be on the up. At my firm we’ve seen an increase in clients coming in with compromise agreements. Every year companies like to get the dirty business over with before management and HR settle down to a slice of turkey and a mince pie. With rumours circulating about massive public-sector redundancies and the long-awaited Public Spending Review about to be announced next week, I don’t suppose this year will be much different.

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Things employers shouldn't ask …

Most people know that employers these days shouldn’t in job interviews ask women of child-bearing age when they intend to start a family.  Nor should they now ask potential employees how old they are.  The reason in both cases is that (a) it is usually going to be none of the employer’s business but, also, (b) it runs the risk of the applicant/employee later stating that the failure to appoint them was on discriminatory grounds. A report on the Personnel Today website from a few days ago questioned the wisdom of Cherwell District Council in asking employees to state whether they intended to retire in the next two or three years.  The Council is currently asking staff to work fewer hours or to work without pay to avoid the need for redundancies.  However, its request to staff to detail their plans and aspirations over the next two to three years could lead to them facing an age discrimination claim, suggests the article, if an employee could show that they were selected for redundancy because of their stated plan to seek retirement.  The same risk would apply if a woman stated she intended to start a family and was subsequently place “at risk”. 

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BA is in the news again …

BA has been in the news … again and, as usual, for all the wrong reasons. The company formerly claiming to be the world’s favourite airline has now asked 40,000 of its staff to not just take a pay cut but to work for nothing for a month to ensure the company’s survival.  Now there’s an enticing offer … not.

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More on Redundancy v Pay Cuts


I posted on this subject a while ago and it has received such a lot of visits I thought I better give my public more of what they want. It also gives me an opportunity to provide an update on the poll I set up below on this issue. At the moment 57% of respondents would elect a pay cut and 31% would take redundancy.  The remaining 11% didn’t know.   Whether those results will change after this post wil be interesting to see.

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Redundancy or Pay Cut?

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? 

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