BT is trying to farm out some of its workers to rivals in the latest attempt by a big British company to trade through the recession with as few compulsory redundancies as possible.

The radical move comes as BT struggles to turn around its failing IT services unit. A company spokesperson said that the scheme was in its infancy and the names of the “national and niche businesses” involved were commercially sensitive.

BT is one of a number of companies that has been forced into a radical rethink of its employment terms. British Airways, which caused consternation among its employees and anger within its unions this week when it asked staff to work for nothing, has had more than 3,000 applications from its 40,000 staff for its various suggested pay-reduction plans.

KPMG, one of the big four global accountancy firms, has had 750 of its 11,000 UK staff take up offers of sabbaticals of between 4 and 12 weeks on 30 per cent pay or reducing their working week to four days, with a subsequent 20 per cent pay cut.

Car manufacturers were the first during the current recession to offer redundancy alternatives — mothballing factories and implementing pay cuts. Honda closed its Swindon factory for four months and reduced wages by 3 per cent on workers' return.

Stephen Brown, an employment and benefits partner at Latham and Watkins, the law firm, said that there were two main reasons why employers were more willing to avoid compulsory redundancies than they were in the downturn of the early 1990s.

The first is that companies were more aware of the costs of getting rid of workers. “Making someone redundant can often cost the same as six to nine months' salary”, Mr Brown said. “It is not a cheap option and it is a terminal option.”

The second reason is that there has been a “talent deficit”, with businesses struggling to find staff with the right skills. “It's in the company psyche that they don't want to lose good staff and would rather reduce overheads via other means until recovery begins.”

BT is thought to be the first to suggest that its workers are loaned out to a competitor, in a move that raises the prospect of corporate secrets being passed between companies. But industry sources insisted that the workers involved were not party to anything other than “water-cooler gossip”.

In an agreement drawn up with unions, BT described the initiative, part of a wider “Project Holborn” cost-cutting scheme, as “a way of maintaining employees in employment with the company” during the recession.

It said that placements outside the company would be offered initially on a voluntary basis but would be enforced if fewer people than necessary volunteered.

Workers would retain their membership of the BT pension scheme and continue to accrue service during the placements, which would be for a minimum of one month. However, they would be paid by the new company, helping BT to cut its payroll costs.

BT, which has reduced its headcount by 15,000 in the past year, said in May that a further 5,000 permanent positions would go in the next 12 months, along with 10,000 posts held by agency and contract workers.

Employment groups warned that “loaned” staff were often opposed to being forced into a new culture and workplace, particularly if they did not volunteer for the change.

Robert Blevin, external affairs manager of the Chartered Institute of Personnel and Development, said: “It is a marked sign of this recession that employers are being more innovative in their approach to avoiding compulsory redundancies where they can.”

He said that typical problems posed by such schemes included the loaned worker failing to fit into the new culture.

Mr Brown added that, from a legal perspective, any confidentiality agreement would be “nigh on impossible” to police while the employee was on loan to a rival.

Unions are thought to be broadly supportive of BT's plans if they allow it to avoid compulsory job cuts.

BA has offered staff various options in what it called its “fight for survival”. These include working unpaid for a week to a month, which was introduced last week along with the option of taking short unpaid breaks.

In May, workers were offered the chance to take unpaid leave for between a month and a year, or work part-time. More than 1,000 had already volunteered for these.

A BA spokeswoman said “more than 3,000” staff had volunteered for one of the various measures, suggesting another 2,000 have flocked to volunteer for pay reduction over the past week. But she could not say how many had agreed to work without pay. Staff have until Wednesday to decide which, if any, of the plans to opt for.

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