Reducing Labour Costs In Tough Times

The credit crisis and the recent downturn in the economy means many businesses are facing an economic squeeze that leads them to look for ways to save money, including reducing labour costs. But no one wants to terminate valued employees. This update provides some practical suggestions that may reduce costs in respect of active employees and suggests certain cost minimization strategies if it is necessary to terminate.

Reducing Costs Of Active Employees

There are options to reduce labour costs that your business can consider prior to and/or in conjunction with terminating or temporarily laying-off employees. Most employers will want to avoid drastic unilateral changes without advance notice that could result in the affected employees having successful constructive dismissal claims. Non-union employers who are not bound by a collective agreement will have greater flexibility to modify terms of employment. Depending on the specific terms of the employee's contract,