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| Handling the pain as UK plc retrenches | Handling the pain as UK plc retrenches |
| (about 4 hours later) | |
| By Gavin Stamp Business reporter, BBC News | |
| Feelings of job insecurity are growing | Feelings of job insecurity are growing |
| For Andrew Baynham and his fellow workers at a car parts manufacturer in Hereford, the news was not completely unexpected. | For Andrew Baynham and his fellow workers at a car parts manufacturer in Hereford, the news was not completely unexpected. |
| "There was a general feeling that it was coming for a while," he says. | "There was a general feeling that it was coming for a while," he says. |
| But it was still a bombshell when he heard recently that the factory where he spent the last 18 years may close. | But it was still a bombshell when he heard recently that the factory where he spent the last 18 years may close. |
| "There was shock when it was announced." | "There was shock when it was announced." |
| If the gloomy forecasts of recent weeks are borne out, thousands of other people may find themselves in the same situation as Andrew. | If the gloomy forecasts of recent weeks are borne out, thousands of other people may find themselves in the same situation as Andrew. |
| More and more people now fear the worst about their own jobs as the daily diet of bad news about the UK's faltering economy continues. | More and more people now fear the worst about their own jobs as the daily diet of bad news about the UK's faltering economy continues. |
| Job insecurity | Job insecurity |
| One in ten workers think they could be made redundant in the next year, recent research from the TUC found, as job insecurity spreads. | One in ten workers think they could be made redundant in the next year, recent research from the TUC found, as job insecurity spreads. |
| The process of corporate retrenchment is already under way with housebuilders such as Barratt Developments and Persimmon cutting thousands of jobs in response to the slump in home sales. | The process of corporate retrenchment is already under way with housebuilders such as Barratt Developments and Persimmon cutting thousands of jobs in response to the slump in home sales. |
| Further job losses in the City seem inevitable as banks nurse huge credit losses while it is feared up to 40,000 jobs could go in the services sector with estate agents and retail staff worst hit. | Further job losses in the City seem inevitable as banks nurse huge credit losses while it is feared up to 40,000 jobs could go in the services sector with estate agents and retail staff worst hit. |
| One member of the Bank of England's Monetary Policy Committee has warned that up to two million people could find themselves out of work by Christmas if economic trends continue. | One member of the Bank of England's Monetary Policy Committee has warned that up to two million people could find themselves out of work by Christmas if economic trends continue. |
| If you have worked in a business for 20 years and you are in your late 40's or early 50's, going back into the job market is a scary prospect Michael Leftley, employment lawyer at Addleshaw Goddard | If you have worked in a business for 20 years and you are in your late 40's or early 50's, going back into the job market is a scary prospect Michael Leftley, employment lawyer at Addleshaw Goddard |
| Union leaders, gathering next week in Brighton for their annual Congress, say there are growing "jitters" in the workplace and have urged ministers to take urgent action to boost confidence. | Union leaders, gathering next week in Brighton for their annual Congress, say there are growing "jitters" in the workplace and have urged ministers to take urgent action to boost confidence. |
| At the same time, they are worried that some firms may start to panic and reduce their workforces much more deeply than necessary. | At the same time, they are worried that some firms may start to panic and reduce their workforces much more deeply than necessary. |
| "There is a real danger that if everyone thinks that the downturn will be deeper than it needs to be it will become a self-fulfilling prophecy," warns TUC general secretary Brendan Barber. | "There is a real danger that if everyone thinks that the downturn will be deeper than it needs to be it will become a self-fulfilling prophecy," warns TUC general secretary Brendan Barber. |
| Paid to go | Paid to go |
| Evidence of this nervousness was illustrated by the recent outcry over leaked plans by Marks & Spencer to cut staff redundancy pay for staff. | Evidence of this nervousness was illustrated by the recent outcry over leaked plans by Marks & Spencer to cut staff redundancy pay for staff. |
| The retailer is consulting with employee representatives about proposals to reduce severance pay for some staff by up to 25%, leading unions to protest that substantial cuts are on the horizon. | The retailer is consulting with employee representatives about proposals to reduce severance pay for some staff by up to 25%, leading unions to protest that substantial cuts are on the horizon. |
| Even in the event of a cut in payments, M&S argues that it will still offer more than its competitors. | Even in the event of a cut in payments, M&S argues that it will still offer more than its competitors. |
| One employment lawyer says M&S has historically been regarded as among a "paternalistic" group of major British employers which have tended to give staff much more than the statutory minimum redundancy payment required by law. Firms such as Marks and Spencer have to tread carefully over severance pay | One employment lawyer says M&S has historically been regarded as among a "paternalistic" group of major British employers which have tended to give staff much more than the statutory minimum redundancy payment required by law. Firms such as Marks and Spencer have to tread carefully over severance pay |
| But Addleshaw Goddard's Michael Leftley says this only serves to highlight the relative paucity of the statutory redundancy scheme, which was first introduced in 1965. | But Addleshaw Goddard's Michael Leftley says this only serves to highlight the relative paucity of the statutory redundancy scheme, which was first introduced in 1965. |
| The maximum weekly pay used to calculate payouts, alongside age and length of service, is currently capped at £330. | The maximum weekly pay used to calculate payouts, alongside age and length of service, is currently capped at £330. |
| Currently, someone aged 49 with 20 years service at a firm under their belt would be entitled to a maximum sum of about £7,900. | Currently, someone aged 49 with 20 years service at a firm under their belt would be entitled to a maximum sum of about £7,900. |
| "The statutory minimum is not much if you think people have put in 20 years service," he says. | "The statutory minimum is not much if you think people have put in 20 years service," he says. |
| "It is not going to leave you much of a cushion. If you have worked in a business for 20 years and you are in your late 40's or early 50's, going back into the job market is a scary prospect." | "It is not going to leave you much of a cushion. If you have worked in a business for 20 years and you are in your late 40's or early 50's, going back into the job market is a scary prospect." |
| Redundancy stigma | Redundancy stigma |
| But while being made redundant will always be a traumatic experience, Michael Leftley says the job market is much more flexible than during the last recession. | But while being made redundant will always be a traumatic experience, Michael Leftley says the job market is much more flexible than during the last recession. |
| Equally importantly, he believes employers' attitudes towards redundancy and periods out of work have changed. | Equally importantly, he believes employers' attitudes towards redundancy and periods out of work have changed. |
| "The stigma attached to redundancy has largely disappeared. If you were made redundant 20 years ago a prospective employer may have seen it as a black mark against you. | "The stigma attached to redundancy has largely disappeared. If you were made redundant 20 years ago a prospective employer may have seen it as a black mark against you. |
| "They may have thought there must be a reason for that beyond a downturn in work such as you were not performing." | "They may have thought there must be a reason for that beyond a downturn in work such as you were not performing." |
| The way firms now fire and hire people has changed totally.Has the stigma of redundancy truly disappeared? | The way firms now fire and hire people has changed totally.Has the stigma of redundancy truly disappeared? |
| "Businesses expand and contract more quickly now. They are looking to shed staff in bad times and hire again when the economic cycle starts an upturn." | "Businesses expand and contract more quickly now. They are looking to shed staff in bad times and hire again when the economic cycle starts an upturn." |
| How much firms pay employees they are discarding will always be an emotive subject but particularly when the economy is in trouble. | How much firms pay employees they are discarding will always be an emotive subject but particularly when the economy is in trouble. |
| Earlier this year chemicals giant ICI was taken to an employment tribunal by a former worker who argued its policy of paying older and longer-serving staff more in severance pay was discriminatory. | Earlier this year chemicals giant ICI was taken to an employment tribunal by a former worker who argued its policy of paying older and longer-serving staff more in severance pay was discriminatory. |
| ICI said its policy rewarded loyalty, reflected the greater vulnerability of older workers should they lose their jobs while its generosity encouraged people to leave, creating opportunities for younger staff. | ICI said its policy rewarded loyalty, reflected the greater vulnerability of older workers should they lose their jobs while its generosity encouraged people to leave, creating opportunities for younger staff. |
| Meanwhile, firms altering the terms of their redundancy schemes face potential legal claims on other grounds. | Meanwhile, firms altering the terms of their redundancy schemes face potential legal claims on other grounds. |
| If these terms have been in place for a long time, some lawyers argue that they have effectively become a contractual entitlement for employees and no longer at the firm's discretion to change. | If these terms have been in place for a long time, some lawyers argue that they have effectively become a contractual entitlement for employees and no longer at the firm's discretion to change. |
| Big decisions | Big decisions |
| There is also the difficult issue of whether workers should be entitled to a payment when they have been offered alternative employment but have turned it down because it is not suitable for them. | There is also the difficult issue of whether workers should be entitled to a payment when they have been offered alternative employment but have turned it down because it is not suitable for them. |
| If I want to try and do the same job I am doing now, I would have to travel about 40 or 50 miles Andrew Baynham | If I want to try and do the same job I am doing now, I would have to travel about 40 or 50 miles Andrew Baynham |
| Awaiting the outcome of the consultation process on his factory's future, Andrew Baynham is considering whether to apply for a job at Triplex Components Machining's other plant in Stratford. | Awaiting the outcome of the consultation process on his factory's future, Andrew Baynham is considering whether to apply for a job at Triplex Components Machining's other plant in Stratford. |
| "If I want to try and do the same job I am doing now, I would have to travel about 40 or 50 miles," he says. | "If I want to try and do the same job I am doing now, I would have to travel about 40 or 50 miles," he says. |
| "There is not a lot around for me in Hereford. I would have to retrain." | "There is not a lot around for me in Hereford. I would have to retrain." |
| With petrol prices so high, he is worried whether such a daily commute will be worthwhile. | With petrol prices so high, he is worried whether such a daily commute will be worthwhile. |
| But with a mortgage to pay and a daughter still in school, he knows it may be an opportunity he might not be able to turn down. | But with a mortgage to pay and a daughter still in school, he knows it may be an opportunity he might not be able to turn down. |
| "You have to find some money the way bills are going up." | "You have to find some money the way bills are going up." |
| As the pain of an economy in retreat really begins to bite, more and more people are facing equally tough decisions. | As the pain of an economy in retreat really begins to bite, more and more people are facing equally tough decisions. |