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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

Parents
  • Keith is exactly right.

    Assuming you have exhausted all other options and there is no other alternative, you need to begin consultations as soon as possible. This will be a painful, difficult process. There will be denial, anger, tears and threats (and that's just the management). You will need to be open to alternatives and willing to hear feedback whilst, at the same time, pressing forward as urgently as possible with your plans to prevent your current losses from spiralling. You should plan to lose a chunk of your staff very quickly as they jump to other, better jobs. But, having worked in the care industry, I suspect you might be surprised by how few that is. All the same, you should make recruitment plan to back-fill the jumpers as quickly and efficiently as you can, bringing new people on board on the new contracts.

    You should also take into account that zero-hours contracts aren't a panacea and are in the cross hairs for various political groups to make them illegal, so in the medium term you should also ask yourselves if any other solution could be made to work should that come about.
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  • Keith is exactly right.

    Assuming you have exhausted all other options and there is no other alternative, you need to begin consultations as soon as possible. This will be a painful, difficult process. There will be denial, anger, tears and threats (and that's just the management). You will need to be open to alternatives and willing to hear feedback whilst, at the same time, pressing forward as urgently as possible with your plans to prevent your current losses from spiralling. You should plan to lose a chunk of your staff very quickly as they jump to other, better jobs. But, having worked in the care industry, I suspect you might be surprised by how few that is. All the same, you should make recruitment plan to back-fill the jumpers as quickly and efficiently as you can, bringing new people on board on the new contracts.

    You should also take into account that zero-hours contracts aren't a panacea and are in the cross hairs for various political groups to make them illegal, so in the medium term you should also ask yourselves if any other solution could be made to work should that come about.
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