Protection of jobs 'is at tipping point'

Jul 7 2009 by Sarah Green, The Journal

Many would say that one of the critical issues for the UK currently is increasing unemployment.

The CBI has this week published a package of labour market investments and reforms, including an alternative to redundancy which could help stem the tide of job losses.

The report stresses that the UK must work much harder to remain an attractive global jobs destination, and that there is a need to improve skills and assess the real impact of employment laws on future job creation.

Although firms are doing their utmost to protect jobs by introducing flexible working and pay freezes, the CBI predicts that unemployment will continue rising to peak at 3.03 million in the second quarter of 2010, so action taken in the short term could still save jobs and businesses.

The CBI calls for:

The Government to implement an Alternative to Redundancy (ATR) scheme as soon as possible. This would give organisations the choice to use the present redundancy path or to place an employee on ATR for a set period of up to six months.

The Government must review the length of consultation for redundancies, to check if the laws are working as intended. Currently, firms must give a consultation period of at least 90 days where 100 or more employees face redundancy in a three-month period. This timeframe prolongs uncertainty for staff and delays firms trying to adapt to rapidly changing circumstances.

The 2011 rise in employer National Insurance contributions should be deferred. The lodging of employment tribunal claims under multiple headings must also be tackled.

The CBI believes the UK has reached a tipping point on employment regulation. New laws since 1998 have added £70bn to business costs – equivalent to employing 215,090 people in full-time jobs at average earnings. All future legislation should be tested by the question: how will this help create sustainable jobs?

Young people are being particularly hard hit by the recession. The Government must aim more assistance at young people.

The worst of the recession may be over, but businesses still face a long convalescence and the dole queues will continue to grow. The alternative to redundancy scheme could perform a critical role, saving jobs by giving businesses more leeway as the economy recovers and critically helping retain talented skilled people in our region.

Sarah Green is regional director CBI North East