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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

AIBU to reduce her hours

76 replies

BycullahRoad · 13/04/2022 06:58

Name changed as do not want to be too outing.

I run a very very small business and I have just one employee. I have employed her on a part time basis for over 10 years. She is someone to talk to for advice, she covers for me if I am unavailable, and is frankly better at certain things that I am. Having her around means I can take holidays and have sick days etc. We have been a good team. I think she appreciates the job, as it has provided a steady income for her and she is able to arrange the work around the school run etc.

As I am getting older, my business is declining, and with efficiencies that have been made, frankly there are not the hours that need doing anymore. With recent minimum wage increases I can no longer afford to keep her on the hours she is doing, but I don't want to lose her. A few months ago I suggested that she reduces her hours and get another part time job elsewhere. She says she does not want to as she would lose her tax credits. She has said that if I reduce her hours she will have to leave. Just discussing this has created friction between us.

I'm in a dilemma, I don't want to lose her, because then I would have to recruit and train a new person, but I can't afford to keep her on the hours she is being paid for. Suggestions anyone?

OP posts:

throwaway201809 · 13/04/2022 08:31

She's worked for you for 10 years, is in your words, better than you at some tasks, and is still on minimum wage?

BrieAndChilli · 13/04/2022 08:31

Can you explain a little bit more about your business? We might be able to come up with something to help increase your business or some other alternative that doesn’t involve cutting her hours. Eg her taking over and buying the business from you. But we need to understand why the business is decreasing in turnover

RedHelenB · 13/04/2022 08:32

[quote BycullahRoad]@girlmom21, no my business probably is not viable for much longer, but I am close to retirement age. Not trying to fudge the system but I was wondering if I kept her on for 8 hours a week, would she be able to get another job elsewhere for 8 hours and still get her tax credits?[/quote]
Yes

Sally872 · 13/04/2022 08:36

I would think you need to generate some more income to afford to keep her or make her redundant. I don't think there are any other options if you can't afford pay rise and she can't afford to lose hours.

Having someone you trust to cover holidays is very valuable I would do my best to keep her if possible. Would you decrease your own hours and get a part time job?

user1471457751 · 13/04/2022 08:40

If she changed employment this could be considered a change of circumstances and trigger a move to Universal Credit. Given she hasn't voluntarily made that switch she will probably be disadvantaged by it.

I think you need to get advice from an employment solicitor around whether this is a redundancy situation and what your options are.

Ninjaexpress · 13/04/2022 08:41

Sit down with her and set it out properly. Talk about the options. Could she build the business a bit more to increase income? If she did then could you do some sort of profit share on top of her small wages? Would she take the business over when you retire? Show her the accounts, explain that if things don't change you will have to make her redundant. I'm assuming you have the resources to do that, and hoping that after her faithful service you might pay a bit more than the minimum legal settlement.

fairylightsandwaxmelts · 13/04/2022 08:46

@BitOutOfPractice

I’m struggling to understand how someone who covers for the owner of the business is on minimum wage!

I used to run a shop with a turnover of over a million pounds a year.

I was paid minimum wage.

MrsLargeEmbodied · 13/04/2022 08:46

yes, talk to her,
try and find mutually agreed hours of work

BitOutOfPractice · 13/04/2022 08:50

@BycullahRoad

I'm just trying to do things in the nicest possible way bearing in mind she has been an employee for over 10 years and has helped me out on many occasions.

Yet she’s still on minimum wage. Do you earn minimum wage op?

I think you need to look afresh at your whole business model tbh.

And yes thanks, I understand basic economics @Loopytiles having run my own business for 25 years 😬 don’t be obtuse. My question was why is someone who is senior enough to cover for the business owner on minimum wage because if the op is also on minimum wage the whole business sounds doomed.

Op you have to reduce her hours (and make sure you do so in accordance with her contract - she has a contract right?) or make her redundant and pay her proper redundancy in which case you can’t take on someone else in the same role.

Fulmine · 13/04/2022 08:50

Mummyoflittledragon · 13/04/2022 08:52

How committed is she to the business? I don’t see a solution to reduce her hours in a way she is prepared to stay. Would she be willing and able to take over the business? You could sell / give it to her depending on its worth and contractually agree a consultancy fee for x amount of time for you as you hand the business over.

Roselilly36 · 13/04/2022 08:59

I can see your dilemma, it’s a very tough time for small businesses. but you will need to accept the employee may not want to work two different jobs to make up the hours to help you out. They may prefer to just have one employer and have the flexibility and scope of more job options if they need to work 16hrs as opposed to just 8 per wk x 2 employers. I would expect she may already be looking for another suitable post, knowing the business cannot sustain her employment ongoing. Good luck.

Original poster

BycullahRoad · 13/04/2022 09:02

Thanks for all the suggestions, I can't really respond to specifics about the business but yes I am on minimum wage too and I don't draw any dividends.

OP posts:

Oxborn · 13/04/2022 09:04

@BycullahRoad

Can anyone help me in relation to tax credits so that I can help her with that particular issue? Apparently you need a payslip stating that you work 16 hours a week. Would two jobs of 8 hours a week also count?

Yes that would be fine

FairyCakeWings · 13/04/2022 09:08

If she’s deliberately doing a 16 hour job just so that she can keep her tax credits, then it sounds like she needs to improve her work ethic and do more hours, not less, especially if she’s been doing this for more than 10 years.

MrsLargeEmbodied · 13/04/2022 09:09

that is unfair and unecessary @FairyCakeWings

Justkeeppedaling · 13/04/2022 09:13

Would she want to take on the business completely when you retire?

PanicAtTheDisco2000 · 13/04/2022 09:17

I run my own business with a small number of employees. My understanding is that reducing someone’s hours is a variation in the contract and can be done without an employee’s agreement if the current contract allows for it. If she then chooses to leave cos didn’t like new hours then it is not a redundancy situation. I strongly suggest legal advice around this so you don’t get tripped up.

Hankunamatata · 13/04/2022 09:23

I wouldn't want to take on an extra job op just to keep my existing one on less hours.

girlmom21 · 13/04/2022 09:24

@Justkeeppedaling

Would she want to take on the business completely when you retire?

That's an idea. Sell her the business if you're not earning anymore from it than she is. Ask her to keep you on as an employee until you retire.

FairyCakeWings · 13/04/2022 09:24

@MrsLargeEmbodied

that is unfair and unecessary *@FairyCakeWings*

Not really. It’s doing nothing wrong legally, but morally, working as little as you can to maximise the amount of benefits you can claim is no different to maximising the loopholes you use minimise your tax bill.

JaceLancs · 13/04/2022 09:30

There are many acceptable ways to change her contract with sufficient notice etc and if she is unhappy with that then it would be her choice to leave - I would suggest that you get proper HR advice for this process
However the kindest option would be to make her redundant - after 10 years she would get a small lump sum - you are then free to advertise a role on different hours

WeBuiltThisBuffetOnSausageRoll · 13/04/2022 09:31

How does that work in practice, though? Is there a limit to how much you can vary? Surely that's extremely ripe for exploitation: reduce an employee's hours down from 35 a week to half an hour a week, rather than make them redundant, and wait for them to 'decide' to leave without any payout?

I'm also shocked at two people at management level being on minimum wage. The business is obviously greatly struggling and no longer really viable (if it ever has been), but NMW is basically designed for people at junior level and/or with no significant personal responsibility or difficulty to their role.

How can it be fair for a business manager to only be on NMW when somebody employed to make the tea or distribute the post would be paid the same?

WeBuiltThisBuffetOnSausageRoll · 13/04/2022 09:34

I wouldn't want to take on an extra job op just to keep my existing one on less hours.

Neither would I. In theory, both scenarios are the same in effect; but the reality is very different - apart from everything else, you have to fill in a tax return every year, which most people don't relish.

MrsLargeEmbodied · 13/04/2022 09:36

it is very hard to find an 8 hour job

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