You've lost your job. Shock, horror. As the knowledge sinks in, your stomach churns and your brain goes into overdrive. How are you going to pay the mortgage and the credit card bills? How can you afford to eat? Well, relax. There are lots of things you can do, according to the readiness of your company to help, your contract and your attractiveness to new employers. And there is an enormous recruitment industry out there, ready and waiting for your CV to get you your next job.
Losing a job is being faced by hundreds, if not thousands, of people who were employed by the dot coms that have gone bust. There are also huge corporates, such as Compaq and Nortel, making thousands of workers redundant in the US and elsewhere. European employees of these companies are wondering whether they are going to be in the same boat.
Reassuringly, companies such as Nortel have systems in place to help workers made redundant. "We will look for opportunities for redeployment within the organisation," claims a Nortel spokeswoman. "We have very well developed talent management resources and redeployment counselling schemes. We [also] have an internal jobs market using on-line intranet channels."
Some employers, such as ICL, keep an eye on the constantly changing demands made by their business and the skills needed to do the various jobs in the organisation and make sure their employees are kept in touch with any adjustments that need to be made in advance.
Accent on redeployment
Support units within the company employ dedicated managers to look at individual skills and performance to allow employees affected by redundancy the opportunity to top up skills or change direction. If redundancies do need to be made, the accent again is on redeployment within the company.
"From the company's point of view, it is more cost-effective to redeploy," says
Deirdre Murphy, group employment manager at ICL.
The company offers employees access to internal and external job searches and gives guidance on how to network CVs. Career counselling and interview improvement techniques are also made available. "We allow employees to take time out, ask what do they want to be doing for the future. They can then work with managers to help them through that," says Murphy.
Another option for those employees of 50 and above is early retirement, which is open to any employee. "This depends on each individual circumstance," explains Murphy. But age is not the criterion, the emphasis is on what each individual has to offer and how that contribution can be enhanced both for the company and for the employee.
So there is considerable scope for the company to help employees who have lost their job. The contract you were given is also an important factor. All employees are protected from unfair dismissal by the law after one year's service, and can take employers to tribunals if they want to.
Some do, but what has to be remembered here is whether you can get another job afterwards. Employers might be reluctant to give references to an employee who has taken them to a tribunal. This situation can also give an employee leverage: offering to settle a dispute with an award of cash without going to a tribunal.
"You will often get situations where the employer doesn't want to go through the whole process that would make the dismissal fair, he wants to get shot of it quickly," says Elizabeth Slattery, a lawyer specialising in employment law at Lovells. "Then you would often find that there might be a negotiation, but it is still going to be around what the likely compensation is that you would get if you had to go to a tribunal."
Tribunals can award sums of money up to the statutory limit for compensation, which is £51,700. They can also make a basic award calculated by reference to an individual's age and length of service, but that sum is capped at £240 a week.
Awards vs rewards
Tribunals can order employers to reinstate employees and if the employer refuses, then the tribunal can make an additional award - usually between 13 and 26 weeks' pay - but then again it is subject to the £240 a week limit. These sums of money are quite small in comparison to the rewards that could be waiting in a new job. Moreover, the time and energy spent on going through a tribunal could be better employed looking for a new job.
"Particularly for a reasonably well-paid individual, you can imagine that £51,000-odd doesn't go very far, especially when you are thinking about things like missing out on bonus scheme payments," says Slattery. This is particularly so of Save As You Earn schemes. "I have certainly seen one tribunal where the whole of the £50,000 was assessed as being purely referable to the loss on the SAYE schemes," she says.
Notice periods connected to contracts are important too. If an employee leaves a company without working the notice period, there is a loss to the employee which a tribunal award might not be able to match.
"If they have got a long notice period, then what is the loss under the contract?", asks Slattery. "If someone has got a 12-month notice period and they are earning £100,000 a year, then obviously you can soon reach a calculation which is significantly more than a tribunal would have the jurisdiction to award."
Currently, says Slattery, employees have two possibilities when made redundant. One is entitlement to a statutory redundancy payment, again in very low limits, calculated in the same way as the basic award for a tribunal, which is age and length of service multiplied by a week's pay, capped to the £240 a week limit, and to a maximum of 30 weeks.
Second, they can claim that their dismissal was unfair, especially in the situation where one company is taken over by another. "Employees might still be able to say there was a redundancy situation, there was a need to reduce the numbers, but you went about the selection in an unfair way, so you could claim unfair dismissal," says Slattery.
But the pressure on employers to make awards isn't only limited to the law - they have their public image to think of as well as their relationship with their clients. The reason why employers prefer to redeploy workers rather than make them redundant is precisely because it is costly for them, both in monetary terms and the cost to their reputation.
"I think more and more you will see that employers will have a scheme that is more generous than statutory. In a way, that is where the consultation process becomes quite important," argues Slattery.
People on short-term contracts are also protected by law, but only after one year's employment, or two consecutive six-month contracts. But a non-renewable contract can be classified as a dismissal and therefore deemed unfair. This whole area is being put under the spotlight of European law.
A European directive is saying that employers should not be able to discriminate against short-term contract workers just because they are on short-term contracts. This may deter employers from offering these contracts in future, which is a shame, as it curtails the freedom of the employee to move around.
However, in the information technology industry, both in sales and on the technical side, employees take some pride in being able to negotiate their own deals. "We have 500-600 candidates a week for senior sales and senior management on our site," says Paul Smith, CEO of FirstPerson Global, the on-line technology recruitment arm of Harvey Nash, the executive search company. "Seventy-five per cent want to find out what makes companies tick, what jobs are out there and what their peers are earning, and a lot of them are looking for staff and want to understand what is attractive."
Recruitment companies are matching candidates, some of whom have been made redundant, "at a rate of 20 a week", according to Graham Williams, regional director of Hays IT. Emma Robinson, recruitment manager at Hays Interactive, reports an increase in technical consultants, producers and designers looking for work after the dot com crash. "We are able to place them," she claims.
Pauline Cox of Hi-Calibre Personnel reports that it is more difficult to place employees with Windows NT skills and Web designers because of the downturn, but employees qualified in UNIX are still extremely sought after, and so are good sales people. "Good sales people are still very hard to find and so are marketing people. I think business and sales are still booming," she says.
So, if you've just lost your job, take heart. There's a big world out there waiting to hear from you.