Page 85 - Socially-responsible-restructuring-Effective-strategies-for-supporting-redundant-workers

Socially responsible restructuring
Effective strategies for supporting redundant workers

move more successfully to sustainable jobs or other destinations such as
education and training.

Enhanced severance terms

In some cases employers will offer a different level of final payment to those employees who
volunteer for redundancy rather than wait for the employer to decide which jobs are declared
compulsorily redundant. In the UK, statutory redundancy payment requires an employee to have at
least two years length of service before being eligible for any severance pay. The total amount
payable is based on age:

• Under 22 years old – 0.5 weeks pay for each full year of service with the same employer.
• 22-41 years old – 1.0 weeks pay for each full year of service with the same employer.
• Over 41 years old – 1.5 weeks pay for each full year of service with the same employer.

However, in the case of one company, the basic entitlement was enhanced with and extra GBP
5 000 for those volunteering for redundancy, the incentive being that this fell to GBP 2 000 for those
made redundant compulsorily.

This type of enhanced package is quite common among UK employers except that in many cases
the terms are agreed through negotiation between employer and trade unions, normally on a
company or plant basis, and then form part of a collective agreement. Those taking voluntary
redundancy would normally have the same access to support and guidance as others.

Source: Van Kempen, 2008.

Elsewhere, this may be a situation that many firms going through restructuring
can ill afford, especially when the focus is on urgent restructuring, rapid cost
reductions and business survival. Here there is a clear role for local, regional and
national support structures stepping in to fill any gap left by the employer caused
by the intensity or dislocation. However, delivery of such support normally means
continuing the service once the displaced employees have left the company and
this can lead to problems of access or commitment on the individuals’ part and
difficulties for the support providers in retaining contacts with, or even tracking
down, their potential clients after redundancy.
The scale and distribution of job losses will tend to have an effect on the scale,
quality and method of support delivery. Some firms can be overwhelmed by the
situation, particularly if this is a new experience. While there are no specific
examples of this among the case studies, there were a few cases where firms
found it a challenge to deal with the changes. In the EnergoMont (Slovakia) case
study, the company had few resources to provide support for displaced staff and
had to rely on external public support through the PES (Case study 3). Similarly,
in the UK, the financial situation of a company meant that it could not afford to put

79