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Help - Current Business Model No Longer Financially Viable

Gemma McArdle

Hi,

Can anybody with experience of this advise me on the best cause of action in this circumstance.  My company is a care provider, one of their teams is currently operating at a loss because the funding that is coming in from the local authority isn't enough to cover the staffing costs and is no longer financially viable in its current state.  The company needs to change the way the staff are paid and contracted.  So instead of being on a permanent fixed hours contract they will need to be zero hours.  The work is still there, they are inundated but the company currently pay the staff an hourly rate and their travel is covered.  Because of the shortfall in the LA's funding they need to change the way the staff are paid and operate in order to continue.  My company will raise the hourly rate that is paid going forward to offset the loss in travel pay which will be an effect of moving onto a zero hours contract and they are quite confident that the staff will still get the same amount of hours to work because of the demand but it is a major change.

What would be the best approach/option in this kind of situation, they want to do the best they can for the staff in a very difficult situation but don't want to fall foul of any breach in employment law either?

Thank you for any thoughts anybody might have on this.

Gemma

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  • I am confused. You say the staff will still have the same hours, that the hourly rate will increase and you will take away travel payments. So in totality are staff better or worst off!?

    I am assuming worst off as you are trying to save money. Do it’s best not to try and dress this up as anything other than it is.

    You have contracts with the staff. You can only vary these contracts by consulting and reaching agreement , or terminating the existing contracts and offering/imposing a new one.

    Moving someone from salaries to zero hours is frankly such a fundamental change that it’s hard to see why anyone other than the most desperate would accept such a change. So you maybe in the situation where after consultation you need to fire and rehire. Which us a risky strategy but maybe your only one.

    There is an argument over if redundancy applies as work of a particular kind may have ceased or diminished ( although the overal volume of work clearly hasn’t). So you at least need to be prepared for that debate.

    On a side issue I find it totally incomprehensible that the only way to deliver savings is to cut the income of the workers. Who I would guess are already not hugely remunerated. It’s a sad reflection on the state of social care in the uk. Inevitably we all get old and it’s not looking great is it?
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  • I am confused. You say the staff will still have the same hours, that the hourly rate will increase and you will take away travel payments. So in totality are staff better or worst off!?

    I am assuming worst off as you are trying to save money. Do it’s best not to try and dress this up as anything other than it is.

    You have contracts with the staff. You can only vary these contracts by consulting and reaching agreement , or terminating the existing contracts and offering/imposing a new one.

    Moving someone from salaries to zero hours is frankly such a fundamental change that it’s hard to see why anyone other than the most desperate would accept such a change. So you maybe in the situation where after consultation you need to fire and rehire. Which us a risky strategy but maybe your only one.

    There is an argument over if redundancy applies as work of a particular kind may have ceased or diminished ( although the overal volume of work clearly hasn’t). So you at least need to be prepared for that debate.

    On a side issue I find it totally incomprehensible that the only way to deliver savings is to cut the income of the workers. Who I would guess are already not hugely remunerated. It’s a sad reflection on the state of social care in the uk. Inevitably we all get old and it’s not looking great is it?
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