CBI Proposes Alternative to Redundancy

A radical alternative, proposed by the CBI, recommends that workers whose firms are suffering a fall in demand be paid to remain at home. The proposal states that staff should be paid a nominal weekly wage of £130 to which both the Government and the employer would contribute. The employees would then stay off work for up to six months until their employers were in a position to take them back once the economic downturn has eased.

Termed the ‘Alternative to Redundancy (ATR) Scheme’, the CBI announced that employees would not work, but would be paid an allowance equal to twice the rate of the Jobseeker’s Allowance, with half coming from the employer and half from the Government.

The scheme suggests that employees would not be refused the opportunity of seeking new work, but their employment rights would be retained where such opportunities fail to materialise.

Whilst on the face of it, this seems an interesting solution to redundancy, I have a number of problems with the proposal:-

1. It seems to me that this just provides employers with an opportunity to avoid their redundancy responsibilities. Surviving on that amount, without a redundancy pay-off, for up to six months is likely to be very tough for many people. Redundancy provides individuals with an opportunity to take stock of their life and maybe consider ‘doing it for themselves’. This ‘limbo’ period provides little solace for the individual and seems unfairly stacked in favour of the employer.

2. As stated above, the sum of £130 a week is well below the average rate of pay and impossible for many to live on.

 3. What happens if the individual finds a job in the period? Do they still get their redundancy pay or are they deemed to have left voluntarily?

4. The scheme seems to pay scant regard to the demoralising and damaging social effects of having a whole raft of individuals being forced to stay at home in many cases, waiting to find out whether they are indeed being made redundant. No, I do not support this proposal and once again, not unsurprisingly from an organisation like the CBI, it does far more for employers, (who have probably suggested it), than it does for employees.