The recent job summit came up with some interesting ideas for creating jobs. The ones that received the most publicity were the nine-day fortnight, the length-of-the-country cycleway, and an investment fund involving the Government and banks as partners.
There were a large number of other ideas,
including tax holidays for businesses in strife, government loan guarantees for small businesses, and relaxing immigration rules to allow wealthy foreigners into New Zealand, "effectively making New Zealand a big retirement village" according to the National Business Review .
Much has been written about these ideas already by commentators more informed on such matters than I.
However, it seems to me that with all the emphasis on new job creation schemes, we may be forgetting the obvious. Far more could be done by some employers to save jobs, rather than just deciding to make large numbers of employees redundant. When reading several Employment Relations Authority decisions recently, I had the distinct impression that some employers (by no means most or all) are not thinking carefully enough about alternatives to dismissal. Here is a good example of an employer taking a rushed decision to make someone redundant, and making little or no effort to explore alternatives.
There are often more possibilities than you might think. These include:
- Redeployment into other vacant roles
- Where there is a vacancy requiring a different skill set, agreeing a period of re-training
- Flexible working - in particular, job sharing, working from home (to save overhead costs), and compressed hours (where an employee does the same number of hours in a reduced number of days, which also cuts down on overhead costs)
- Restricting overtime
- Agreeing changes to working patterns or shifts, thus achieving a reduction in the hours worked
- Relocating staff
- Bringing out-sourced work back in-house
- Offering early retirement
- Offering reduced pay as an alternative to redundancy
- Asking for volunteers for redundancy
- Attrition - not replacing departing staff
All too often, most of these are not even considered by the employer, let alone discussed with the employee. It is also important for employees to do their bit - most employers will carry out a period of consultation before making staff redundant (as required by law), and this is the employee's opportunity to make sure the employer really considers all the alternatives.
Finally, there's the Employment Relations Authority. Some argue that the Authority has in some cases been too ready to accept an employer's insistence that it needs to save money in general terms, without examining whether a particular post is genuinely redundant, or whether the employer has made adequate efforts to explore all realistic alternatives. This isn't the place to embark on an analysis of different redundancy cases, but suffice to say it is an area that is likely to receive closer attention from the Authority as long as the recession continues.
Greg Cain