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Companies cautioned: play by redundancy rules

Companies cautioned: play by redundancy rules

Employers looking to reduce workforce costs in the current economic climate must remember there are clear rules to be respected if they wish to avoid costly claims that would outweigh the…

Employers looking to reduce workforce costs in the current economic climate must remember there are clear rules to be respected if they wish to avoid costly claims that would outweigh the initial cost reduction, according to the Recruitment & Consulting Services Association (RCSA).

Employers are reminded that in most cases an employer cannot make unilateral decisions to reduce hours, reduce salaries or add additional duties beyond position descriptions to cover the work of others who may have been retrenched, the RCSA said.

"Before making the final decision to cut jobs, employers should have open and honest discussions with their employees to determine whether an alternative arrangement can be reached, but employers need to understand the parameters relating to such alternatives," said Charles Cameron, director of workforce management consultancy Stratecom, a member of RCSA's business solutions centre.

"If no alternative arrangements can be made and a company is left with no other choice than to retrench employees, employers need to make sure such retrenchments are carried out correctly and in accordance with contractual provisions, company policies, legal principles, legislation and awards, so as to avoid breach of contract claims, unfair dismissal claims, discrimination complaints, industrial agreement breaches or industrial action, just to name a few."

- Craig Donaldson

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