How can I make sure employees get redundancy entitlement?

Discussion in 'Growing and Managing a Business' started by Cookie, Mar 17, 2011.

  1. Cookie

    Cookie
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    We are a very small business (Ltd Co) and have been operating at a loss for a year now. As directors we have been supporting the company with our own money to keep it going and to protect employees jobs. However, we have now run out of funds and although we are still trying to generate new business, we are in a position that if new business is not forthcoming we will have to cease trading in 3 - 6 months. We do not want to reach a point where we are insolvent. We do not want to make our employees redundant (they have been working with us for 12 years) but if we do not give notice now we will not have enough funds to pay their redundancy entitlement. Can we put them on notice of redundancy now and then lift the notice in three months time if business improves?
    Can anyone advise?
     
  2. Fergal

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    Welcome to our Business Forum Cookie. What country is your business based in?

    I really can't see any reason why not, but the answer will depend on the legal jurisdiction that your business is based in. How much notice do you need to give your employees?

    One danger with what you are suggesting is that your best employees may find jobs elsewhere and you might be left with your less capable staff.
     
  3. Cookie

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    Thanks, Fergal. We only have the good employees left! Have been restructuring over the years and employing more short term freelance contractors. Need to give three months notice (one week for every year of service - we're in the UK) We are concerned about the psychological demotivation effects as well...If you knew your job was at risk, would you bother to work towards building the business back up? On the other hand we feel we ought to be honest about how close to the wire the situation is.
     
  4. Fergal

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    Cookie perhaps if you advise your staff that the business is in serious risk and that it will only survive if everyone pulls together as a team, this will have a positive motivational effect on the staff team, that could be very beneficial to the business?

    Do you need to give three months notice or do you need to given one week of redundancy for every year of employment?

    You might be able to get some free information and advice from the UK Department of Work and Pensions or Department for Employment and Learning. If neither of those government departments can advise you, they should be able to point you in the direction of someone who can.
     

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