Retailers planning to shrink their High Street presence always need to make sure they are complying with employment law, Jade Linton of Thursfields Solicitors has warned.
Jade comments come after House of Fraser announced it was closing more than half of its department stores, while Poundworld was considering closing up to 100 of its discount stores, with both moves resulting in thousands of job losses.
Jade, an associate solicitor in the Employment team at Thursfields, said businesses making compulsory redundancies should first consider how they might be avoided.
She said: “Companies needing to bring down costs may consider restricting recruitment, reducing hours and removing non-permanent staff before they start making compulsory redundancies. Perhaps even retraining and redeploying staff to areas of the business generating greater profits might be an option.
Other alternatives can include temporary lay-offs, unpaid leave or offering voluntary redundancies and early retirement programmes, all of which can reduce pay costs in a business and minimise job losses.”
Jade said companies were obliged to inform and consult with staff during any such restructuring exercise, even if this involved changes to contracts rather than actual job losses.
She said: “Whenever an employer proposes changes affecting 20 or more staff at one establishment, they must inform and consult with those employees or their representatives, giving 90-days notice of such proposals.
Aside from their legal obligations, it’s always best for employers to be as transparent as reasonably possible with staff. For instance, if offering part-time work might be a way to avoid job losses, employers should use clear figures to demonstrate the likely job-savings.
Likewise, if pay freezes or pay cuts are proposed, companies should show the real savings these will allow and, if possible, bosses should lead by example from the top by making sure they are equally affected by these changes.”
Jade also advised staff affected to engage in any such consultations, as these should always be two-way processes.
She added: “If staff know cost-saving is the aim, they can perhaps think of alternative ways to make efficiencies, and in difficult economic climates they may agree to options they wouldn’t usually consider so their jobs remain secure.”
Jade also warned that when implementing any alternatives to redundancies, employers should retain enough flexibility to reverse arrangements on short notice, in case of sudden improved trading conditions, and that they should always take advice from an employment law expert.
For further advice please contact Jade Linton on 0121 624 4000 or email firstname.lastname@example.org