Year off work, part-time employment, no pay for work. Hit hard by the global economic slowdown, United Kingdom looks for alternative to redundancy

The UK Employers’ organisation, the Confederation of British Industry (CBI) has published a report proposing alternatives to redundancy during the economic downturn. It is calling on the government to implement an Alternative to Redundancy scheme (ATR), whereby employees would be released from work for six months, but would be paid an allowance double the existing Job Seekers Allowance –  paid half by government and half by the employer. Whilst on ATR workers could look for alternative work, but the employer could also take the worker back after the ATR period, or earlier if business improves. If it does not the workers’ redundancy rights would be preserved. The CBI argues that such a scheme would retain skills and give workers greater security. The Trades Union Congress is not supporting the scheme arguing it is better to keep people in work and training, even if this is in the form of short-term working. UK unions are campaigning for the kind of wage subsidies common in the rest of Europe.

The CBI’s report follows UK telecom company BT’s proposal that staff take a 75 per cent pay cut in return for a year off work, with the remaining pay paid up-front. The company which employs 100,000 workers and faces £1.3 billion losses in the first quarter of 2009 has also offered a one-off payment of £1000 to encourage staff to work part-time and allowing parents the opportunity to work during school time so they can spend time with their children during school holidays. The deputy general secretary of the Communication Workers Union, has said that the ‘summer sabbaticals’ will avoid compulsory redundancies and are a « great opportunity for staff to pursue travel, study pursue travel, study or other activities while knowing they have a job to return to ».

British Airways has claimed that more than 1000 of its 40,000 staff have agreed to voluntarily move to a part-time position or take unpaid leave of between a month and one year in support of its cost-reduction programme. The company has recorded record losses of £401 million and is looking to reduce its workforce by the equivalent of 3,700 full-time jobs this year. The company then went further and asked staff to follow the Chief Executive’s example and volunteer to work without pay for up to a month, with salary deductions spread over three to six months. Unions responded angrily pointing out that the Chief Executive earned £62,000 a month and that he could afford to work a month for free, whilst their members could not. A national officer of the GMB trade union commented, ‘Until the BA executives accept permanent change to their remuneration and bonus awards then I would find it increasingly difficult to assume that most staff would take this request seriously.’

Sea also:

The CBI report (in english)