Monday 18 November 2019

The bottom line must rule for all employers in State

Redundancy is a tragedy but sometimes survival can be at stake, writes Emer O'Kelly

THE only certain thing for people made redundant in the past year is a savage drop in income. And whether they are employees, self-employed or contract workers at high or low level, their reactions vary from sleepless nights spent worrying about how best to utilise redundancy lump sums (if they exist), to restless days of frantic fitness regimes interspersed with slightly hopeless attempts to expand work horizons beyond what seemed so fulfilling and certain only a couple of years ago. There is also, of course, the shattering dilemma of family responsibility: people are losing their jobs while their children are still in need of full (and expensive) support.

There's also the battle to keep self-esteem intact; when you're accustomed to defining yourself 50 per cent (or even more) through your work, the mental wounds are brutal when it disappears or retracts.

Recession creates a vicious circle in the area of redundancy. Announcements of voluntary redundancy schemes look very attractive in good times as people see a future of increased leisure, maybe even an alternative career, together with what amounts to an early and often generous pension. But in good times, such offers are rare: companies need their full complement of staff.

The public service, although its members and trade union representatives deny this vociferously, is a fairly obvious exception. Indeed, many of the more recently established wider public service organisations, those set up from the Fifties onwards, were deliberately given a staff complement well in excess of requirements, the laudable aim being to provide employment for a population emerging from the economic devastation of the pre-Lemass era. The corollary of that was that Ireland was then a low-wage economy.

Some public service organisations did attempt staff reductions through voluntary redundancy schemes over the years. But they frequently found that it was their brightest and best who "took the shilling" and by their nature went on to develop successful careers in the private sector . . . often in competition with their former employers. And the employers finished up with the time-servers and barely competent still sitting at their desks with smiles on their faces.

But voluntary redundancy looks a lot less attractive in such serious recessionary times as ours. Everyone is frightened. The prospect of going under is a daily terror in the private sector. Good employers don't fire people gratuitously. The first task is to ask staff to take a cut in pay; in the private sector people accept the necessity, and while they may grumble, they're well aware that it's preferable to redundancy.

The next step, at least for large companies such as international corporations, is to look for voluntary redundancies. In good times, employees would have been queuing up, the freedom of the open world or an alternative job beckoning. But in a recession there are no other jobs, and what once looked like a welcoming world now looks like a scary empty space. So the application date for redundancy passes with very few names on the list.

But the circumstances have not changed: the company still needs the redundancies in order to survive. The next step is inevitable: compulsory redundancy. This is usually on the basis of "last in, first out," but there are times and places where the choice may be more selective, with a company making a value judgement as to who must go. That means taking tough decisions, even if friends and long-time colleagues are involved: survival can be at stake.

Intel, one of our major international companies, made 83 employees compulsorily redundant last week. They were in the workforce at the Leixlip plant, part of which, management says, has not been running at full capacity for years. More than a month ago, the company issued a statement seeking one hundred voluntary redundancies.

The day before the St Patrick's holiday, the 83 workers received the bad news that they had to go: the voluntary scheme had been hugely under-subscribed. It's believed that only 30 workers applied for it, but management has not confirmed this. It's a tragedy for the people involved and for their dependants, obviously, but one wonders at the shock that has been expressed by the workers concerned.

Presumably the hundred required redundancies weren't a figment of anybody's imagination, nor was the number pulled out of the air. Companies such as Intel mean what they say; they're not charitable institutions. They have to be ruled by the bottom line on the balance sheet; and that includes costs below the line, a requirement which frequently doesn't apply in the public service.

The private sector has the advantage over the public service in that management is considered a trade like any other, requiring a specific training. In the public sector, management teams frequently lack expertise, having "risen through the ranks" which while personally admirable frequently means that they have stopped doing the job they were good at, and have started trying to do a job for which they are untrained, and for which they may have no aptitude. It doesn't make for confidence.

Infrastructural costs in the public service have, of course, been a constant topic of consideration and conversation in the period leading up to and following the Croke Park deal. But it always seems ephemeral, even slightly unreal: after all, governments don't go out of business, even though the personnel may change.

We had the situation with the HSE: it was supposed to be in part a cost-saving exercise when it was set up to replace the local health boards. Mary Harney was willing to see redundancies and redeployments at a time when people would not have suffered by them. Bertie Ahern as Taoiseach had different ideas: downsizing health service administrative jobs meant downsizing Fianna Fail votes, so the HSE monument was cast in bureaucratically cumbersome granite. And when Minister Harney finally succeeded in getting Cabinet agreement for a voluntary redundancy scheme in the HSE, the recession had set in, and it was under-subscribed.

Things will remain that way; no government will be prepared to face the storm which compulsory redundancies will create. We have a new department created specially to reform this mess. But Brendan Howlin has already suffered his first defeat: the proposal to cut the anachronism of the two "privilege days" which civil servants have enjoyed since the foundation of the State (a device to allow them to go home, presumably by bicycle, to see the Mammy) has been thrown out.

The Minister has announced that he will bring plans to Cabinet within the next couple of weeks for a "root-and-branch review" of all public spending. It may seem cruel to suggest it, but perhaps he should just send the books to the heads of a few major companies like Intel: they manage to maintain a reasonable standard of decency as employers while having to keep a firm eye on the balance sheet. Indeed, most of them are far better employers than some public service organisations which, due to their lack of management expertise, not merely cost the institution a fortune, but behave like Victorian overseers due to their lack of management training.

Sunday Independent

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