The tumbling oil prices and the security of employment for those within the oil and gas sector has a clear knock on effect to the security of employment of those working within this sector.
In the North East alone many companies are considering restructuring their operations and invariably this means jobs will be affected. To what extent jobs will be affected will be partly determined by how imaginative employers can be with balancing the need to retain skills whilst also making costs savings.
One approach for one company may not suit another company but the same legal principles will apply to all employers. These principles include the following:
- short time working and lay-offs may be an effective short term solution but employers need to check they have the contractual right to rely on statutory schemes;
- any temporary or permanent variations to contractual arrangements typically need the express consent of the employees involved. Variations could include anything from temporary sabbaticals and extended holidays to changes in shift patterns and rates of pay;
- where temporary solutions do not address the needs of the employer in dealing with the issues, more permanent action may be required, such as restructures and redundancies;
- voluntary redundancy exercises are often less painful for employees but may result in challenges for the employer. For example, individuals with desirable skill sets may apply for voluntary redundancy yet employers may be reluctant to let them go;
- compulsory redundancy exercises are often time consuming and tricky. Indeed, any redundancy/termination exercise may require collectively consultation to be carried out with employees before dismissals take effect. Employers will need to factor in the statutory time periods for conducting such consultation. Where there is a proposal to dismiss between 20 and 100 employees within a 90 day period employers will not be able to dismiss employees until 30 days have passed. Where the number of dismissals may exceed 100 employees this period increases to 45 days; and
- failing to properly inform and consult staff can result in punitive ‘protective awards’ of up to 3 months’ pay.
Whatever adverse situations may affect your operations, it is important that new strategic opportunities, such as, for example, oil field decommissioning, are explored just as much as addressing the internal and existing stakeholder aspects.
If any of Muckle LLP’s restructuring or employment teams can help, we are always available for a confidential discussion to help you weigh up the different options available.
For more information, help or advice please contact Andrew Davison on 0191 211 7950.