CBI proposes and alternative to redundancy
A report by the CBI and Siemens plc calls for a package of labour market investments and reforms, including an Alternative to Redundancy Scheme (ATR), to help stem the tide of job losses as the recession pushes unemployment towards an estimated three million.
The report contends that although firms are doing their utmost to protect jobs by introducing flexible working and pay freezes, it is predicted that unemployment will continue rising to peak at 3 million in the second quarter of 2010, so action taken in the short term could still save jobs and businesses.
As part of a pro-active strategy being called for, the CBI has asked the Government to consider implementing a new initiative, the Alternative to Redundancy Scheme, as soon as possible. This would give organisations the choice to use the existing redundancy path, or to place an employee on ATR for a set period of up to six months. The employee would not work during that time, but would be paid an ATR allowance equal to twice the rate of Job Seekers Allowance – paid half by government and half by the employer.
ATR will allow the firm to take the employee back when the ATR period expires or if business improves earlier. If demand fails to pick up then all redundancy rights are preserved, and would include the 6 months extra of ATR service. An ATR scheme would only be implemented following consultation, as is the case with redundancy. The CBI argues that ATR helps firms retain skills during a short and sharp fall in demand and gives workers greater security of returning to work.
The CBI is also calling for the consultation period of at least 90 days where 100 or more redundancies are proposed to be reviewed as it considers that the timeframe prolongs uncertainty for staff and delays firms trying to adapt to rapidly changing circumstances.
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