A controversial move to quell the numbers of redundant workers has this week been proposed by business leaders.

The CBI has called for a shake-up in the way companies deal with redundancy by proposing the “Alternative to Redundancy” (ATR) scheme. Workers would receive about £130 a week, paid equally by the government and the employer and remain at home for up to six months, with a view to being called back to work when economy improves.

“Businesses will be more able to cope with sharp drops in demand and prepare for recovery, while workers benefit from improved financial support and a door that is kept open for six months,” said John Cridland, the CBI’s deputy director-general.

However the suggestion of such a scheme has angered the unions who have protested that it would allow businesses to exploit redundancy rules as employers would only have to give to workers on the scheme four weeks’ notice as opposed to the current employment rules that require employers to hold a 90-day consultation if they want to make more than 100 people redundant.

In addition, workers on the ATR would also not be awarded any redundancy packages. Brendan Barber, general secretary of the TUC, said: “There will be worries about whether employees who took up this option could end up losing redundancy rights and the big cut in income they will face, without any cushioning redundancy pay for the first six months.

“It is also better to keep people in work and training with their employer, even if on short-term working, rather than sitting at home, which is why unions and other employer groups are campaigning for the kind of wage subsidies that are now common in the rest of Europe.”

Currently UK unemployment sits at 2.22 million. The CBI has warned that this figure is set to rise to around 3.03 million by the second quarter of next year unless more is done to help stem the loss of jobs and businesses.