Page 112 - Socially-responsible-restructuring-Effective-strategies-for-supporting-redundant-workers

Socially responsible restructuring
Effective strategies for supporting redundant workers

Trade union involvement in the sector and in this company has a long history
and currently most staff are unionised. However, agreements reached between
the unions and the company apply to all employees, irrespective of their union
membership status. The company feels it has a useful and collaborative working
relationship with the trade unions. However, the main collaborative framework,
the employees’ forum, includes not only trade union representatives but also a
representative from non-unionised staff members and management.

6.4.2. Restructuring and job losses
The current wave of restructuring for the company in this area has been triggered
by the sharp downturn in motor vehicle demand. The global nature of the slump
means that all areas of the business have been affected, though UK
manufacturers have been hit particularly hard. However, it also represents one
stage of a continuing process of restructuring, with this one having particular
significance in that it will see two plants closed completely and all manufacturing
operations focused on one plant.
Adjustment of the workforce has been a way of life for the company for some
time now and it has a well-established procedure and policy in place. The recent
job losses have been in stages and have involved fewer than 100 employees on
each occasion. The relevant legislation requires at least one month’s notice to be
given and the time used for consultation with trade unions, other representative
groups and individual members of staff.
The firm has a policy of calling for volunteers first, though it will effectively
exclude some staff from this call if they are considered key to the company’s
operations. In these recent cases of redundancy the calls have been met with a
fairly muted response that allowed just 18% of the total jobs required to be lost to
be released through voluntary severance terms. This was largely attributed to the
fact that previous redundancy activities had effectively exhausted the numbers
who would consider voluntary severance, plus the effect of the current poor
labour market prospects acting as a deterrent. The company can no longer offer
an early retirement option due to the pressures exerted by the increasing cost of
maintaining the company’s generous pension scheme, a problem that is affecting
many UK companies at present.
The terms of the redundancy package on offer are the same for those taking
the voluntary option as those being made compulsorily redundant. The statutory
entitlement is boosted by 50% in each case, all based on length of service.
However, the lack of any differential between the two severance packages may
be a factor in the relatively low response to the call for volunteers in the latest
rounds of job cuts.

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