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Alternatives to Redundancy

by Dean Kilpatrick and Josephine Toop

While redundancies seem inevitable for many businesses, there are other cost cutting methods and alternatives that some employers are considering.

Alternatives include looking to redeploy employees from quiet worksites to busier areas, or elsewhere in the organisation.

It may also be possible to ask employees to take accrued annual leave or any long service leave. They may also be amenable to reduced hours or even agree to a period of unpaid leave.

Employers could seek to improve productivity by cracking down on absenteeism and poor performance. On a worst case scenario, if those employees did not lift their game they could be dismissed, leading to a cut in overall numbers. Naturally, following the correct procedures will be crucial in managing performance and absenteeism and any subsequent dismissals.

Finally, the employer might consider cutting back on the use of contractors for some tasks and spread those duties among current employees, eliminating the cost of paying contractors to do tasks that employees, who are not busy, could easily carry out.

Avoiding redundancy is clearly beneficial for employees, but it can also have benefits for employers. Redundancies can, amongst other things, have negative impacts on morale, reputation and market image.

Whether the above alternatives are possible in every workplace will depend on the circumstances, including applicable employment agreements and policies. However, these cost saving opportunities are likely to be generally available in most businesses. 

Employers should take care that they comply with the law in implementing redundancies or any of these alternative cost saving measures.  Challenges from disaffected employees are the last thing a struggling company needs.

• Dean Kilpatrick and Josephine Toop are part of the trans-Tasman specialist employment team of  Duncan Cotterill. D.Kilpatrick@DuncanCotterill.com
• Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.