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Monday 28th of June 2010
July 6, 2009    

CBI proposes ‘Alternative to Redundancy’ scheme

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by Kay Murchie

In a bid to prevent rising job losses, the CBI is proposing an “alternative to redundancy” scheme.

The scheme would mean employees would remain at home for up to six months, with a view to being called back to work when economic conditions improve. Alternatively, if demand is still low, employees would then be offered redundancy.

Under the scheme, workers will receive around £130 a week (with half to be paid by the Government and half by the employer). The rate is twice that of Jobseekers’ Allowance, which currently stands at around £64 per week.

Unemployment figures have been escalating during the economic downturn with unemployment in the UK currently at 2.26 million. During the three month period to April, there were around 444,000 workers made redundant.

The CBI recently warned that unemployment will continue to rise and could reach 3 million by the second quarter of next year unless action is taken to help businesses and stem job losses.

John Cridland, the CBI’s deputy director general, comments: “The alternative to redundancy scheme could save jobs by giving businesses more leeway as the economy recovers.”

“This is not about businesses ducking their 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,” added Mr Cridland.

However, the proposed scheme has raised some doubts with Brendan Barber, TUC General Secretary, who said “There will be worries about whether employees who took up this option could end up losing redundancy rights and the big cut in income they will face, without any cushioning redundancy pay for the first six months.”

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