CBI plans alternative to redunancy scheme (From Western Telegraph)

CBI plans alternative to redunancy scheme

2:26pm Wednesday 8th July 2009 in Jobs

Employers could avoid losing skilled workers through layoffs if the government backs an alternative to redundancy scheme proposed by the CBI.

Under the proposals, employers could offer workers a six-month delay to redundancy. During this time, employees would not work but would receive an ATR allowance worth twice the rate of jobseeker’s allowance. Half would be paid by the employer and half paid by the government.

The idea is that this six-month window would reduce salary costs and give businesses the chance for trade to pick up, enabling staff to return to work.

John Cridland, CBI deputy directorgeneral, explained this scheme would create no extra cost for the government, unlike wage subsidies, and was only likely to be taken up by businesses that were serious about saving jobs.

“Businesses will be more able to cope with sharp drops in demand and prepare for recovery, while workers benefit from improved financial support and a door that is kept open for six months,” he said.

Cridland said ATR was a voluntary scheme and would only apply when there was no alternative job.

He said it would not affect workers’ rights to take redundancy at any time or find another job.

“This is not about businesses ducking 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,” he said.

Andreas Goss, Siemens’ chief executive, said he supported ATR and highlighted the CBI’s call for a long-term focus on skills and training to support expected job growth in the new technology and green sectors.

He said the UK needed a highly motivated, adaptable and skilled workforce to compete globally.

Cridland also highlighted GlaxoSmithKline and Rolls Royce as examples of companies looking to attract global business in the long term with highly skilled UK workforces.

Goss said: “Government can help by ensuring a good standard of highly literate and numerate workers coming through an education system where there has been investment in science, technology, engineering and maths subjects.”

Cridland said the worst of the recession was over, but added: “Businesses still face a long convalescence, and the dole queues will continue to grow. The CBI predicts that unemployment will continue to rise, peaking at 3.03 million in the second quarter of 2010.”

He also called on the government to review the length of redundancy consultation because the 90-day period applicable for 100 or more affected employees ‘prolonged uncertainty for staff and the organisation’.