SURVIVING A RECESSION

An economic downturn has an impact on both business owners and employees. With hundreds of headlines threatening uncertainty you may be finding it difficult to know what to do.

If you are an employer and your business is struggling, you may be considering cutting back on your workforce. If you are an employee, you may be worried about how your employer will react to the economic downturn and how that will affect you.

Our focus this week is to help you understand and explore the options available to support you through difficult economic times from both a business owner’s view and also from an employee’s view. Should your business or job be affected by the economic downturn, it is important you know your options and make an informed choice which is why we have now outlined front burner questions which may likely have crossed your mind either as a business owner or as an employee.

Employee

Q1- How do I keep my job during a recession?

A1- Even in a recession employers need skilled employees. You can help yourself    keep your old job or get a new one by:

• Agreeing clear objectives with your manager and doing your best to achieve them
• Developing your skills and competences by taking advantage of opportunities for, carrying out new tasks, training and further education.

Q2- My employers want to change my contract – can they do this?

A2- Your contract can be changed by mutual agreement between you and your employer. Where you don’t agree to a change, it is possible your employers may terminate your original contract, with proper notice and by following any relevant procedures. They may then offer you a new contract including the revised terms. There will be no breach of contract as a result of taking this action. If you accept the new contract your continuity of employment is preserved.

Q3- How should my employer be selecting employees for redundancy?

A3- Ordinarily an employer should use objective criteria (e.g. attendance record, disciplinary record, skills etc.) wherever possible, when selecting employees for redundancy. The Labour Act also advocates the principle of “last in, first out” however in practice the discretion lies absolutely with the business owners.

Business Owner

Q1- Should I have policies in place to manage a downturn in business?

A1- Even if you are not currently experiencing a downturn, now is the time to get your policies and procedures agreed and in place. 

Q2- Are there legal implications for business re-organisation?

A2- The law in Nigeria allows a business owner to reorganize the business in any manner that he/she deems fit, however such business owners must keep in mind the provisions of Nigerian Labour Law which clearly spells out procedure for redundancy, contract staffing, variation of contract etc. In the case of business transfer or mergers the provisions of the Companies and Allied Matters Act should be taken into cognizance.

Q3- Can I vary an employee’s contract of employment?

A3- Wherever possible this should be done by mutual agreement. Where agreement is not possible you can consider terminating the original contract by giving notice as specified (or implied) in the employee’s contract. You may then offer a new contract to the employee, including the revised terms. There will be no breach of contract as a result of taking this action.

Q4- How do I select employees for redundancy?

A4- You should try wherever possible to use objective criteria when selecting employees for redundancy. Basing your selection on skills or qualification will help you to keep a balanced workforce appropriate to your organization’s future needs. You must also put into factor the benefits stipulated by law to be paid to employees selected for redundancy.

When the economy heads south, companies must adjust to the business climate and the ripple effect is felt by employees and customers. Adaptation, Preparation and Communication however remain key ingredients for surviving a downturn.