Businesses want redundancy alternative
Businesses are calling on the government to provide an alternative to redundancy as unemployment levels head to three million.
The Confederation of British Industry (CBI) said employers need an alternative to redundancy (ATR) scheme during the recession, which would allow firms to suspend staff for up to six months.
The employee would be paid an allowance equal to twice the rate of Job Seekers Allowance, with half paid by the employer and half by the government.
At the end of the six months, employees could either return to work if demand has picked up, or will have full redundancy rights, including the six months ATR service.
John Cridland, CBI deputy director-general, said: "The worst of the recession may be over, but businesses still face a long convalescence and the dole queues will continue to grow.
"This is not about businesses ducking their redundancy responsibility - in fact if a scheme runs for six months and a redundancy is still made then the business will end up paying more."
TUC general secretary Brendan Barber said there are worries about the big cut in income staff would face.
He added: "It is also better to keep people in work and training with their employer even if on short-term working, rather than sitting at home, which is why unions and other employer groups are campaigning for the kind of wage subsidies that are now common in the rest of Europe."
The government should also review the length of consultation for redundancies, the CBI added. Currently, firms must give a consultation period of at least 90 days where 100 or more employees face redundancy in a three-month period.
According to the CBI, this timeframe "prolongs uncertainty for staff and delays firms trying to adapt to rapidly changing circumstances".
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