What are the alternatives to redundancies for golf clubs?

Some golf clubs have been so badly hit by the pandemic that they need to make employment cost savings. Here, the NGCAA outlines the alternatives to making a member of staff redundant.

The strains on golf club finances have been eased during the coronavirus pandemic by the introduction of the Coronavirus Job Retention Scheme (CJRS) where employers have been able to place employees on furlough leave and claim a portion of their wages back from the government.

The CJRS is set to close down at the end of October 2020, with a tapering of the amount that employers can claim from the government during the months of August, September and October. This tapering, with the ending of the CJRS on October 31 will bring sharp focus to employment costs for golf clubs across the country. Whilst there has been a general upward trend in the number of new members, those new member subscriptions have not always cancelled out the losses felt through this pandemic. Those new members are not all full fee-paying members; there have been restrictions on visitors and consequent takings on green fees together with golf club bar and restaurant facilities not yet up to full capacity.

The consequence is that many clubs are giving careful consideration as to how they operate going forward. Some will seek to cut costs generally; others will do so because they do not have the same labour requirements as they did prior to the coronavirus pandemic.

The ultimate way in which to cut labour costs may be a redundancy exercise where certain employees may have contracts of employment terminated altogether where there is insufficient work. Golf clubs are well advised to take advice from the National Golf Clubs’ Advisory Association (NGCAA), as well as making use of our template documentation if redundancy is a likely outcome in order to save costs.

However, before looking at compulsory redundancy, there are other options available for golf clubs. Some examples of employment cost-savings in order to avoid redundancies are:

• Offer voluntary redundancy or early retirement (but note that it is sensible to reserve the right to reject applications in order to preserve certain key skills for the ongoing needs of the business);
• Place a ban on, or reduce, overtime;
• Consider putting a freeze on any further recruitment;
• Consider changing employees’ working terms and conditions / contracts of employment. When considering changes to contracts of employment it is important to seek agreement to those changes from the employees. The approach should be made as a ‘proposal’ for ‘possible changes’ in a consultative format with a view to reaching agreement. Golf club employers should take advice if they are considering contract changes, since it can lead to constructive dismissal claims if things go wrong. An example of a useful change might be to reduce hours of work (and consequent pay) within a group of employees, rather than making one (or more) employee(s) redundant;
• Consider a potential temporary layoff or reduced working hours if the contract contains such a pre-existing provision (please note that advice should be taken here to check the veracity of the contractual term, as well as advice in relation to the potential triggering of a redundancy where layoff or short time working lasts for a specified period).

During the course of any redundancy exercise, employers must consider alternatives to redundancy as part of their legal obligations anyway. The above considerations do, therefore, stand employers in good stead in staying on the right side of the law, as well as providing possible savings on redundancy payments and generally fostering better employment relations.

It is also worth noting that the government has introduced a payment for employers whereby they will receive a £1000 bonus for each employee who has been or is brought back from furlough leave who they retain through until the end of January 2021. This is subject to the employee earning above the national insurance lower earnings limit (£520 per month) on average between the end of the CJRS and the end of January 2021. Those bonus payments will be made from February 2021. This may prove a very useful cash injection to golf clubs who are looking to budget staffing costs after the end of the CJRS.

For any further advice in relation to redundancies or alternatives to it, please contact alistair@ngcaa.co.uk or call on 01886 812943.