New redundancy alternative announced

A controversial move to quell the numbers of redundant workers has this week been proposed by business leaders. The Chartered Business Institute (CBI) has called for a shake-up in the ways companies deal with the downturn with the “Alternative to Redundancy” (ATR) scheme. Workers would receive about £130 a week, paid equally by the Government and the employer. This would mean that they would remain at home for up to six months, with a view to being called back to work when economic conditions pick up. “Businesses will be more able to cope with sharp drops in demand and prepare for recovery, while workers benefit from improved financial support and a door that is kept open for six months,” said John Cridland, the CBI’s deputy director-general. However the suggestion of such a scheme has angered the unions who have protested that it would allow businesses to exploit redundancy rules as employers would only have to give to workers on the scheme four weeks’ notice as opposed to the current employment rules that require employers to hold a 90-day consultation if they want to make more than 100 people redundant. In addition, workers on the ATR would also not be awarded any redundancy packages. Brendan Barber, general secretary of the TUC, said: “There will be worries about whether employees who took up this option could end up losing redundancy rights and the big cut in income they will face, without any cushioning redundancy pay for the first six months. “It is also better to keep people in work and training with their employer, even if on short-term working, rather than sitting at home, which is why unions and other employer groups are campaigning for the kind of wage subsidies that are now common in the rest of Europe.”