Managing a Sudden Downturn in Business
How to Manage Your Staff?
The UK is entering unchartered economic territory and no business is ready for what is unfolding.
Many of the strict legal obligations that exist between employers and employees, and in particular many of the rights enjoyed by employees, (as opposed to the self-employed or those classified as “workers”) will suddenly appear misplaced, unwieldly and unmanageable.
This may be the case where your business is experiencing or expecting a sudden and prolonged downturn in business. Employers are looking at trying to manage what will be their largest overhead, namely staffing costs.
All employers will face the conflict of doing what is right for their business to keep it going, and yet seeing their staff come through unsettling times without the additional burden of potentially unmanageable financial stress, making life even worse.
Employee Rights
Many employers will be considering the options of short time working (reduced hours) or a temporary closure.
In the absence of a contractual right to do so, neither closure nor reducing staff hours entitles an employer to stop paying their staff normal rates of pay.
On a strict legal basis, if an employer imposes this, or just stops paying their staff then the employer is in breach of contract and the employee has the right to pursue a claim for all lost earnings. They will become a creditor and furthermore, one can expect that relations will be damaged, probably for good.
What can an employer do?
The answer, is first to review your own contractual terms with your staff and see whether there is any provision that covers either a lay off or short time working.
If there is no contractual provision, then the answer, as with many issues affecting the relationship between employer/employee is dialogue, and an attempt to reach an agreement that is suitably clear and that offers both parties enough that the business can survive and that the employee can be retained.
Both parties need to understand the other party’s circumstances and if concerted efforts are made for each party to understand that then they have the chance of reaching an agreement that works well enough.
We can all see that there are moves by the UK Government to offer support and these measures will play a part, but in most cases and in most sectors this will not be enough on their own.
Naturally parties have to continue to be able to adapt to whatever is agreed as circumstances develop, and that is likely to mean that matters are almost continually reviewed over the weeks and months to come.
Contact
If you wish to know more about this topic, or if your business is affected then please contact Richard Moore, Head of Business Services at Temple Heelis for an initial discussion and we can assess what support you need and the options available for your business.
Email: rmoore@templeheelis.co.uk
Direct dial: 01539 816416