Are employers reluctant to shed workers?

Following the release of UK unemployment data earlier in the week, Sandra Wallace, UK Employment Pensions and Benefits Group Head, DLA Piper, said:

"Unemployment figures and the report released by the Jobs Economist consultancy regarding employers' attitudes towards staff retention highlight the changing culture of employment in the UK; I believe we are moving into a bit of a watershed in terms of Employment Law in the UK. 

It is true that we saw a significant number of restructuring redundancy programmes in 2008, 2009 and, to some extent, 2010 but the slowing of such programmes is, in part, due to companies believing they now are operating at optimum staffing levels that are capable of sustainability for businesses going forward. Also, as a firm we have been asked in recent years for options to save salary costs whilst retaining staff. 

Therefore, there has been an increased focus on flexible working options, advising on work place salary reductions, wage freeze and stringent recruitment freezes. Companies have also looked at cutting other business costs to avoid losing key personnel in a difficult economic climate or damaging staff morale. If a business resorts to redundancy first in difficult times, when the economy improves key staff leave to avoid being at risk in the future. 

Employers do have concerns around the legal consequences of dismissing staff and the costs that are incurred in defending actions, especially with uncapped liability in discrimination cases. However, I think it is the more positive desire to retain a sustainable workforce that drives business decisions. 

It is also necessary to consider the nature of the employment that people are actually gaining. It is clear that there is a rise in part time working or employees being engaged on a fixed term or temporary contract. Employers can then react to immediate short term requirements and then release staff when customer demands decrease.

This is a worrying trend for employees who are seeking permanent employment with more than living wage salaries and it can unduly impact women and those employees heading towards the latter end of their working lives.

On employment tribunals and bridging the wage disparity gap:

There is little appetite in a recession for people to address wage disparity and whilst tribunal claims may be prevalent, causing significant red tape for a lot of employers, equal pay claims are very rarely raised at tribunal. The process of bringing an equal pay claim is also onerous.

With the introduction of tribunal fees, the new requirement for employees to gain two years' service before being able to bring a tribunal claim and other steps being taken by the Government to reduce conflict post-employment between the employee and employer, there may well be another shift in emphasis in how employers react during a recession. Another more controversial thought might be that the UK has got the GPD predictions wrong.  Perhaps they have been too pessimistic?"