CBI Redundancy Initiative

07 July 2009

Geoff Ellis Employment Solicitor

The CBI are calling on the government to put in place an alternative for companies to making workers redundant, offering periods of extended leave on reduced wages instead writes Employment Solicitor Geoff Ellis.

The Confederation of British Industry warned that unemployment would rise to more than 3m by next summer unless action was taken now. The organisation is proposing an Alternative to Redundancy (ATR) scheme, giving the employer the option of placing an employee on the scheme for up to six months instead of making them redundant.

The employee would not work during that time, but would be paid twice the rate of job seekers' allowance – half by the government and half by the employer.

This idea is aimed to help firms retain skills during a short and sharp fall in demand and give workers greater security of returning to work. The scheme would allow the firm to take the employee back into work when the ATR period expires or earlier, if business improves. If demand fails to pick up, full redundancy rights are preserved, including the six months of ATR service.

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