There has been plenty of debate as to how much of the current crisis is reality and how much is a scared reaction to a problem which has been endlessly inflated by the media, by doom and gloom merchants and general speculation.
No matter which side of the debate you’re on, the effects are real. With this in mind, it got me talking to someone about the laws governing redundancies.
For those of you who don’t already know, the law requires employers who plan to make redundancies to give a certain amount of notice to their staff. This seems sensible enough in theory, but in practice it creates utter havoc. You see, the law prevents management from making effective moves in a timely fashion. On taking the unfortunate decision that redundancies are necessary, they must then wait for the allocated period before naming the people who will no longer be required.
The larger the amount of staff involved in possible jobs cuts, the longer the notice period required. The respective notice periods allocated to the staff by their contracts and by other government regulations already give some protection – and this delay simply causes more problems all round.
The workforce is faced with a daunting and nervous wait to find out if they will be part of the cull. Many people panic and start to look for a new job, in case they are made redundant. The better staff are offered other jobs first and often have to make a snap decision to accept these jobs or take a chance. Unsurprisingly, many who are faced with this choice will leave their current job. This, in turn, weakens the business.
For entrepreneurs, the notice period is a frustrating delay to unfortunate but inevitable action. The business faces an exodus of the best staff and a time of low morale. For management, it is probably one of the worst jobs they have to do and this just makes it all the harder.
If we are battening down the hatches in readiness for a full scale recession, these regulations may be in use more often than any of us would like – so perhaps it’s time they were reviewed for the good of all concerned.