CBI champions alternatives to redundancy

The Confederation of British Industry (CBI) has announced plans for a new Alternative to Redundancy scheme which would see firms being allowed to reduce wages rather than laying workers off.

Under the terms of the proposal, businesses would also be permitted to suspend employees' contracts for a period of time, on a voluntary basis, meaning workers could choose to take part.

Anyone taking up this offer would not work and would receive a minimum of £128 a week, paid by the government and the firm in question.

Commenting on the scheme, the CBI's deputy director general John Cridland said that it would help save jobs in firms with cash flow problems.

"We considered various forms of wage subsidy and support for short-time working, but this approach is better," he said.

"Businesses will be more able to cope with sharp drops in demand and prepare for recovery, while workers benefit from improved financial support and a door that is kept open for six months."

A recent study by workforce change management specialists Rialto found that over half of workers questioned would rather see their hours drop than their teammates being made redundant.