COMPANIES are gearing up to sack staff in a bid to maintain their profit levels after the government’s so-called living wage is introduced, a human resources expert reveals today.
Half of employers believe the new minimum hourly rate of £7.20 will affect their wage bill, according to a survey by the Chartered Institute of Personnel and Development (CIPD) and the Resolution Foundation
But trade unions have vowed to fight back against bosses shifting the costs of the rebranded minimum wage for the over-25s.
RMT general secretary Mick Cash said: “There are already strong rumours coming back to us that contracting and facilities companies in the transport sector may be looking at cutting staff numbers, or cutting hours and expecting staff to do the same amount of work, as they seek to protect their profit margins from the introduction of the marginal increase in the minimum wage for over-25s next April.
“That would be an outrageous and cynical manoeuvre that would make a mockery of the government’s claims that they are on the side of working people, when in fact they are standing back and allowing employers to dodge the cost of the minimum wage by paying fewer staff to do more work in order to cushion their profit margins.”
He said RMT would expose and fight any attempt by employers to shift the costs of the minimum wage to the transport union’s members.
Some of the more than 1,000 companies surveyed said they planned to improve productivity and take lower profits once the new rate is in place.
Smaller businesses said they would increase product prices to make up for losses, while a large proportion of public-sector bosses admitted that they would sack staff.
Resolution Foundation policy analyst Conor D’Arcy said it was good that many were opting to improve efficiency over other measures, but added: “Actually delivering this will prove challenging in many sectors and it’s important that firms are given the necessary support to boost productivity.”
The London Living Wage, as set by the Living Wage Foundation, was raised last month from £8.25 to £9.40 an hour.